The insurance will never pay more than the value of the car, so if the repair cost goes too high they’ll just declare it a total loss and pay the “fair market value” of the car. And yes, a total loss is more likely, but that doesn’t mean the insurance pays more, on the contrary, they use that to pay less.
I’d really like to know as well, since I’d like to travel eventually.
As for the canadian woman with improper paperwork, I can tell you usually the worst that can happen (well, before now, that is) was that they’d take you to a separate room for a few hours to check and question you, and, if things eventually check out, they let you through, else, you’d be sent back, especially at a land crossing. You wouldn’t be detained for months, unless you committed some crime or had a warrant