FirebaseD... It's really too bad that all the states can't get their act together and come out with some sort of standard or uniform policy to cover auto titles. As you so eloquently pointed out in your post, every state has such different ways of determining just what qualifies as a "salvage vehicle" it almost becomes a bad joke. It certainly creates an atmosphere conducive to the invitation of fraud, and the ease of misrepresentation.
As for the insurance question, all I know is that you should have no problem getting liability. As for collision, fire and theft comprehensive, I'm not sure. Maybe the insurance companies would go by "appraised value" in that area. My friend Pat (who is in the insurance biz) hasn't logged onto the forum yet today, but I'm sure he could give us all the required info. we need to be "informed consumers".