I'm not sure your facts fall within the confines of Section 1033.  

Based on the facts presented, you have a partial destruction and your gain is the result of a sale and not insurance proceeds.

You should take a look at C.G. Willis v Commissioner.  Here the Tax Court found that the choice between sale and repair of the damaged vessel was based on the taxpayer's preference for the replacement vessel.   In this case, because the taxpayer in Willis was not forced to obtain replacement property, but only preferred it, the statutory requirement that property be “compulsorily or involuntarily” converted was not met, the court reasoned. 

Your facts appear to be very similar and in order to obtain any deferral, you most likely need to meet the rules of Section 1031.