The insurance company should pay a fair full replacement value for the bike.
Agreed. And, read the above statment very carefully. "Replacement value" is just that. What would it cost to replace a 9 year old, used bicycle.
In general, claimants get confused with insurance claim settlements on goods can depreciate. The driver's insurance company does not owe you a 2013 bicycle. They owe you the current value of a 2004 make/model of what was totalled, not even what it costs new.