The insurance company might be only liable for what your bike was worth at the time, not what it would cost to replace it with a new one. Make sure the bike shop specifies that the parts are not repaiable, and must be replaced. When they found out she'd messed up a bicycle, they probably thought they'd have to pay a couple of hundred bucks. If you are covered under any type of insurance, make sure you file the report with them. One company going after the other is different.
The frame that an insurance company might think is perfectly good might kill you on a 45+ mph descent.