It turns out that I didn't have too much to say with the how the insurer resolved the claim. I received a letter from the insurer advising me that they considered the boat a total constructive loss, and offering me the opportunity to buy the "salvage" from them ($4k). I did buy the boat back. Will take the money and make the repairs.
I will not be replacing the rails. After hours of searching the internet for "aluminum rail repair," I found Rex Maugans' rail straightening device in the US patent office. Was able to track him down and buy his first production model. The initial result is promising and I will finish the work in the spring. Will still have to deal with the "scarring," but it will be straight.
The insurer cancelled the policy. In the short-term I plan to just buy liability coverage.
My plan is to take any "extra" money and invest it into the boat.
Thanks for everyone's advice.