Mechanic Shop Liability, Timing belt brakes while running do you A? B? Options

[VavAlephVav]

2001 Kia Sportage, with a 2.0 dohc - my sisters, breaks the timing belt while running. Has it towed to a shop and they tell her it needs a timing belt and water pump. After they replace it Then they figure out, Well the valve smashed a hole in the piston and the whole motor is trash. They still want $800 for part and labor of the timing belt, And we have to pay for a whole new motor and labor to put it in.
As a professional wouldn't you have inspected that First to verify it wasn't trash before replacing the timing belt? Or if they had told her that there was even a Slim chance that Maybe the motor could be completely ruined and that they wouldn't know for sure until they replace the belt she would have never agreed to have them replace the timing belt.
My mom bought this thing brand new and has taken it to the same shop everytime it needed anything, including when the timing belt broke the first time at 99k miles. That time they just put a new belt and pump on it and it started right up. Of course the problem is my Mom won't fix anything until it breaks, which is foolish, but at this point wouldn't you, the professional, inform her that this need to be replaced ahead of time every 60k miles anything beyond that and you're pushing your luck?
I spent some time reading about that motor on the interwebs today and I saw lots of conflicting stories about whether or not it was an interference motor. The official story is that it is Non-interference, yet there were dozens of stories of people who had it break while running and the motor was trashed. And this to me is further evidence of a history of interference that a professional would have been aware of, if they are good.
So Mom gives this thing to my sister, now with 220k on it before the timing belt breaks again. She had it towed to the same shop that she has been going to for more than 15 years, and she's always been happy with whatever they've done for her. I told her not to pay them yet, and when she went up and talked to him today he explained that each time you break the belt while running it always damages the valves slightly, but often it will still run. This to me indicates that he was aware of the possibility of irreparable damage to the motor.
My friend who has a shop and has been in the business for 20 years told me that if he had misdiagnosed something like that he would be eating the timing belt for lunch for weeks. Others tell me I need to stfu and pay the bill like a good boy. The best suggestion I've heard yet is to turn it in to the shops insurance and let their inspector come out and determine if they should have been able to diagnose that in the first place. and of course we could use AAA or BBB to put pressure on them.

I've had my own little LLC doing light commercial refrigeration for restaurants and convenience stores, with repair bills that would rival the cost of auto repair work. And I always figured that because I am the Expert it was my duty to educate the customer. If routine maintenance will save them a lot of money in the long run I at least tell them about it, I don't assume it's their responsibility to understand these things. I am the expert and it's my job to teach them. Now, if they don't listen to me fine, I warned them and if it breaks later down the road it's not my fault. However there are a lot of people in my business who don't do it that way because, after all, they make more money when it breaks so why warn the customer.
I'd especially like to hear what you think if you're a professional mechanic, how easy is it to check for sure before you replace a timing belt, is it standard procedure to be certain before doing a repair like that? Or do you just have no way to tell until you put a belt on it and try to start it?

This post has been edited by VavAlephVav: Dec 5, 2014 - 1:14 AM