Insurance fraud FTL. You guys that recommended it, would you actually do it? Would it be worth the chance to go to prison to get someone to fix your bike (that someone being not responsible for the repairs)?
My insurance (State Farm) follows the vehicle. I've checked several times, and anyone who can legally ride a motorcycle is allowed to ride my bikes at my discretion. I only have liability, which may make a difference, but I've also got $1000 in medical coverage for the rider. Just call your insurer and ask about it. If you're worried that they may record the information as a black mark against you (they do sometimes), just call them up and don't give a name or any identifiable information. Just call as an interested party that wants some details on how they'd handle a given situation.
He ought to be the one making good on the repairs, but "ought to" and "will" are two completely different things in the real world. I had a buddy that crashed my dad's CBR f4 - totaled it, actually - and to date has never made an effort to even pay the deductible. It ended up just being a live and learn experience, I suppose. Maybe one day he'll make good, but I doubt it. And since he married my wife's sister it does no good to get pissed about it - that would just make Thanksgiving dinner taste like crap. Depending on your (or her) relationship with him, which must be at least okay if he's borrowing motorcycles, just be calm, be frank, and just talk to him about it. Maybe he'll take care of it without the insurance, maybe he'll pay the deductible, maybe something else. If he says to heck with you, the most you can really do is just never loan him anything of value again - he'll still be your old lady's pop when the dust settles.