Different states have different laws in regard to insurance. IF the car is totaled, which it may or may not be, the title doesn't necessarily become the property of the insurance company. In CA, if the car is totaled, you can buy it back, but it has a SALVAGE title, I think it's the same in TX. In CA, the title will ALWAYS be Salvage.
Tell you insurance company that you want it fixed, it's probably not as bad as you think if you were going slow, and then you can sell it with a CLEAN and original title. Find similar or identical cars listed for sale and site them as the value of the car.
It would be worth it to fight with them over the value rather than resign yourself to doing a Z project. Doing a SBC swap is not easy, nor is it something you can just decide to do. There are lots of hidden costs, as with any such project. I don't want to try and discourage you, but I'd try and fix my TA if I had one.