The Vanos units are seldom the problem, it's the original seals that eventually fail - what I gather can happen though, if it is left too long, the pistons can end up scoring the chambers in the Vanos, but then the seals have to really be severely worn out. Mine with over 180k km were no doubt worn, but the chambers were still perfectly smooth with no traces of scoring. Basically fitting a new Vanos versus replacing the seals is as far as I am concerned, just a waste of good money - the OEM seals will just wear out again anyway...
Interesting question regarding insurance - I would think (borderline assume) that dealerships have some sort of insurance, but I suppose it's worth asking just to be safe. I would also think that if you as owner have comprehensive insurance there must be cover for things like this, again, probably worth making inquiries.