Have them to give you a bid for rebuild too.  

In my approach if a house is on the edge of rehab vs. tear down and rebuild, I would lean toward tearing it down.

Rebuilding large porches, reroofing complex roofs, stripping and residing a house built way back when.

If you're flipping the property I'd demo and rebuild the floor to modern standards with new materials. 

Complete bath rebuilds and emergencies beyond me I hire a guy moonlighting from a  maintenance co. 

However, unless you are rather experienced with this type of damage, it may be hard for your to tell whether it's a tear-down or rebuild situation. 

In a few years we would extensively remodel or tear down/rebuild.

The company that quoted me the landlord policy told me that it would just be the cash value of the building, not the cost to rebuild (which is fine for the rental). 

I have seen too many times were people have not had enough coverage and had their property fall into disrepair or could not rebuild after a fire.With that said it does depend on the property you are insuring, if you are talking about a property that is only worth $10,000 RCV than I would not worry about the difference. 

The plumber then usually recommends rebuilding the whole wetwall and covering it and the rest of the tile surround with a cheap, ugly acrylic surround kit.