Have you spoken to the contractor doing the work? 5 years ago, we underwent a whole house restoration due to fire. Dealing with restoration company and insurance certainly had it's moments. There were several times when I had to challenge them on their interpretation of original condition. Sometimes I won, sometimes they won, but usually we met in the middle. I found I usually lost the battle when I treated it like a battle (got emotional), but the results were better when I stayed calm and focused on solving the problem. Good luck.

Determine what style & grade of cedar siding & how many sq ft needed. Then price it out. Depending on grade, I would not say that $6K is plenty enough. Labor to install will probably be higher as well as prep & finish. Don't forget to add in whatever trim materials, in cedar, that will be needed.

As far as T-111 goes, I would not say that it is 'terrible'. One friend of ours did replace T-111 with steel siding because of relentless woodpeckers attacking it & drilling large holes in it. OTOH, next door neighbors who live about 1/2 mile away from the woodpecker house have T-111 that is in perfect condition. Both homes built in late 70's. Cedar siding is not immune to woodpeckers, either.

If I'm not mistaken, you can buy cedar T-111 plywood siding.

(I edited my post because it wasn't clear.)

I have T-111 on a field shelter for my horses, mostly because its sturdy and can stand up to their abuse. It’s not cedar.

suedonim75, you are not mistaken. You can certainly purchase Cedar T1-11.

"Why would a contractor choose T1-11 siding over cedar siding?"

Because your contractor can make a bigger profit by substituting budget materials.

A high quality alternative if real cedar is too expensive is to go with James Hardie HardiePlank Siding. It's a fiber cement product that is nearly indestructible and is fireproof. I have it on my house, and it's great. They have a variety of styles, ranging from plain sheets to siding in a cedar-look pattern. You can get it primed or painted. Here is what their "Cedarmill" lap siding looks like:

Just make sure the contractor has experience with this material; it's not brain surgery, but some knowledge is required to do it right, particularly because it is a very hard material to cut, and you need to know how to properly nail it.

A large percentage of even nicer houses in Alaska have T1-11 siding. It's environmentally sustainable, super durable for a difficult climate, reasonably easy to maintain, and inexpensive. We thought about other options but are using it for our build for all of those reasons. If it's not what you want and not what the insurance should be covering, that's one thing, but it's certainly not 'terrible' and I wouldn't worry even a little about a garage having plywood siding. You can also get it in a reverse board and batten look or in a smooth face to do a batten or other trim on. In the world of sustainable architecture there are pretty interesting things being done with plywood.

T-111 is way more hardy than the Hardy Plank. My barn is Hardy Plank, and the horses have no trouble kicking a hole in it. The T-111 is what we use when we get to choose the material.

Most people don't have to worry about horses kicking holes in their garages. Hardie Plank won't catch on fire or suffer from insect damage, water damage, dry rot, or mold. And I guarantee my siding will be just fine when it's time to replace your T-111.

I’ve just found it dings and chips easily. You can’t nail or screw anything into it reliably - it crumbles. But yes, I have an exterminator spray my brick house, my hardy plank barn, my vinyl garage and my wood field shelter for insects every year at the cost of $175. Those suckers hurt like hell when they sting.

For a working barn I can understand wanting certain characteristics. For a house or a garage, longterm durability is the primary issue. The few times I wanted to attach things to my house, a masonry bit in my drill and screws into the sheathing underneath the Hardie plank worked fine without damaging anything.

There's plywood T1-11 and OSB T1-11. If it's crumbly, won't hold a nail, and chips really easily it probably isn't plywood.