This is Mike With The Home Depot in California. I have experienced the same problem in my home. By all means plumb around the problem. The cost of tearing in to that slab is astronomical! Plus just fixing one spot, will leave you open to more leaks from the same pipe later. I had a hot water pipe that feeds both of our bath rooms leak. We replumbed through the attic. Ten years have passed and no problems. Just be sure the job is done by a qualified plumber, and not just some handyman.
Replumbing the whole house is strictly a personal decision. What will it cost, and how will you finance it? Do you plan to stay there long enough to make the expendature worthwhile? Will the repipe increase the value of the house?
These are questions to ask yourself before you go forward.
As for your household insurance, check with your agent. A lot depends upon the coverage and deductable you have. Insurance usually pays for the damage caused by the leak, but not for the actual repair of the leak.
I hope this gives you some insight.
Mike, The Home Depot Answer Man