I guess I would want to find out exactly what I could get from insurance before even thinking that far -- if the shop is willing to declare the frame totalled, will you get a check for the value of the repairs or replacement, for instance?

Personally, depending on how bad the frame looked, if the repair cost were that close the the replacement cost, I'd probably save up and get a new bike, unless that bike were my dream bike. But that's more an emotional response that a rational one.