Well, it means the title is going to be salvaged. That alone always drops its value a lot. Even a slight tweak could throw off the geometry. It may not be able to be aligned properly, and even though you think its fine, you don't want to suddenly notice the problem at highway speeds. Its just not worth it on a 16/17 year old vehicle that on average is worth between $3-$7K in good shape. You have to find somewhere that can repair the frame and I swear its about $2k just to put on the machine. There has to be more to repair then just the frame, so just making a guess here; Then there is everything else: I'm sure that's some body and paint work, it may be the rear end or at least tweaked the mounts, wheel, brake, paint and body... They are paying dealer/shop charge in labor with new parts for a bill that is going to be more than what its worth, when they will total it out if the repair cost is (I want to say) 60%. I would think best case scenario is you can fix the frame for $1K, then pick all your own parts, do your own mechanical work, and don't care about the body. A picture is worth a thousand words, right now without a picture is worth thousands of bucks.
I would think if you could do all that work, for the time, money, and having a clear title to keep the value, I'd rather pick up a cheap project to swap. I don't know where you are, but here I can find a good Tahoe/Yukon with a bad engine or trans for $1500 (or considering you have everything for a good driveline swap with all electronics, an s10, Silverado, blazer).. I'd swap the good stuff over, and sell the rest to recoup a little.
Unless you've done a lot of aftermarket modifications to it, I would just consider it gone. Get your receipts, and maintenance history in order. Do your best to show the insurance company that it was in the best condition possible, and try to get every last dollar you can out of it. Show them that it was well taken care of, and try to get better than "fair" market value.
