Wheels in motion

I'm taking the FZ to the dealer to get the repair estimate written up for insurance. I'd heard several times that any overt damage to the bike's frame automatically results in the bike being totaled. I'm not sure if this is fact or urban myth, but there is visible and overt damage to the frame of the FZ. This may result in one of two possibilties:

1) Insurance totals the bike and I get a check, or
2) Insurance buys a new frame along with the other parts and the bike ends up with either a recon title or a replaced-VIN title.

If they don't total it and replace the frame, the street value on the bike goes completely in the toilet, regardless. It's a "totaled" bike by all accounts after that and won't be worth squat on the street.

This is my worry... anyone know for sure the rules regarding totaling-out a bike with frame damage?