You’ve done the right thing going to the insurance company. We recently had something similar, agreed to do it outside of insurance as I was paranoid about premiums going up. Got the work done which he agreed to pay for and has just disappeared without footing the bill which we are are now stuck with. Insurance company can’t trace him, police aren’t interested, doesn’t help that my wife didn’t get his licence plate. Stupid scenario all round.
Doesn’t matter that it’s an old car. It is now damaged in a way that is no fault of your wife. Get the insurance to do what they’re there for!