Questions about a Salvage bike (insurance, title, etc)

I'm going to buy a salvaged 03/04 GsXR600 off my boss for about $1700 (Runs, rides, just missing the fairings). I called AAA and confirmed it was a salvaged title, no lien or fees just expired registration (about 2 weeks old). Just for continuity, I live in SoCal so the information should pertain to California laws. Thanks!

Questions
- I was told by a co-worker that when insuring a salvaged bike, if in an accident the insurance company will pay nothing due to it being salvaged and most likely already written off completely once. Is this true?
- Best bare minimum insurance? I am not too worried about this bike as it is already pretty sad looking and just going to use it as a learners/commuter bike. My best quote was progressive for about $250/year. The next was Geico for ~$700.

Some states only allow Insurance companies to offer liability on Salvaged vehicles. (Don't know about California; the agent should know)

When full coverage is allowed, they typically will only pay up to 80% of the vehicle's replacement value. You're paying full price for the same policy, though, so you need to decide if it's worth it. (Compared to what you put in the bike) They are not allowed to "pay nothing" regardless of the state of the title. You are paying the premium for a policy to which both you and the insurance company agreed. Failure to honor the terms of the policy is a breach of contract and they are obligated to pay according to the terms or return your premium payments.

$350 difference tells me Progressive was quoting liability and Geico was quoting collision.

-Deek