Is my only option LKQ (Please Help)

A little backstory on my claim, I was involved in a single vehicle accident in Florida I was determined to be at fault for, no other vehicle involved, minor front bumper damage and engine damage.

My vehicle is a 2023 BMW M3 competition with 10k miles on it, basically a brand new car. I got in an accident and the adjuster and repair shop said I need a new engine, the repair shop is a BMW dealership and they stated to my adjuster the my recommend a brand new factory engine given the age and condition of my vehicle. My insurance company wants to put a used LKQ engine in my vehicle, the vehicle is still in warranty and putting in a used engine would void my factory powertrain warranty. They want me to pay the difference between brand new engine and used and they said it’s ~28k.

My arguments is putting in a used engine would void my factory powertrain warranty and LKQ as defined by Florida statute 626.9743 is “fit, appearance, and performance.” In terms of appearance since my engine has my vin etched in it does the engine they want to put in have to have my vin etched in it? My engine requires a 1200 mile break in maintenance to remove the 1200 mile RiS, I have provided the adjuster with my receipt of this work being done on my engine and requested they do the same for the engine they want to put in.

Do I have any leg to stand on here? Can I negotiate that they can use LKQ turbos and parts but the short block has to be brand new OEM? Putting a used engine in my car would tank the value of the vehicle and personally tank the value of it to me. Thanks for taking the time to read this and any advice/input is greatly appreciated.