There's no legal confidentiality attached to school employees- they can relate anything you say to them to other people. In some cases, depending on what you say, they may be legally required to report it to another authority.
You can ask your counselor general legal questions (as you can from anyone), but they aren't a qualified source of legal advice- that's what lawyers are for.
Property damages (PD) and bodily injury (BI) are 2 totally different things.
With PD, easy, since, the at fault insurance either pays to fix, or if repairs exceed the value, they total it and pay fair market value. If, repairs, it is black/white. The adjuster gets the estimate, and they pay based on the estimate.
Since you are 3rd party, they issue the check to you. You can have a shop of your choice do the repairs (based on estimate) and once done, you can just sign over the check from the insurance company. Now, while the car is in the shop, then the insurance owes for a rental, and in your case, they are paying you daily (less) since you still need another car to get around, and with a rental, they are paying for salaries and business expenses, that you do not incur with your own auto.
Now, if you choose, you can cash the check and spend it however you like and not get the vehicle fixed and it is legal, and the insurance company does not care, since you have the choice to drive a damaged vehicle and they close their file. They will, stop any loss of use, since if you don't fix, don't get entitled for the daily rate they are paying you now. With PD, most companies will not have you sign a release, since once paid, you are done.
Even if there is a BI claim, NO insurance company expects you to hold onto the check, or not fix your car, since think about it, it does not make sense.
An injury claim could be settled w/in days if minor, or could take years, if serious. The adjuster will need all your medical bills, doctors reports, any lost wages etc, before they can even consider what/if any settlement is owed for BI. Depending on state laws, may determine if you must meet a thress-hold, like scarring, surgery, broken bones or a permanent impairment, and in others, even whip-lass is paid.
Now with a BI settlement, most all require you to sign a release before they issue a check to be paid. The reason is, they don't want you to come back later and complain of more injuries, so you have to be ready to settle or wait till all of your medical problems are solved, or if the statute of limitations runs, then you have to file a lawsuit to keep it open till settled.