RM911, Sorry for the delay in response....I am still a happy camper with the work that the TOYOTA dealer did for me. I've had no issues and my car runs as good as it did prior to the replacement. Question? I know how my piston rods/arms were damaged, but how were yours? I can't imagine this happening unless you went through what I did OR you had low oil pressure. As for your questions:
1. I have 'comprehensive' coverage. This coverage on my insurance covered the damage done to my car by unnatural causes or non-collision. I was very fortunate to have this added to my policy.
2. Cost on your block engine will be VERY expensive to do. This is not to mention the concern of warranty coverage on the work done. You'd be hard pressed, if at all, to find someone to do the work and have a good extended warranty. The labor alone will be astronomical! I remember calling and asking my LEXUS advisor about the very same thing and all he said was that would be more than the standard 80% damage cost of repair vs. your car's worth....Meaning the insurance company would simply write it off as a loss. I then asked point blank how much it would cost to just put a brand new motor straight out of the box (he said that they actually had those available) and he told me you'd be looking at about $17K!!!!! Yes, I said $17,000 (not a typo). He said the route that my insurance company was going was the best route.
With all this said, I'd recommend you do what I did. By the way, who is insurance carrier? This may make a difference.