Like others have already said, refuse this offer, send them ads etc, and you will get better offers, may take 2 or 3 times to get near what you want but it will go up. If it doesnt that when to start really slagging off the insurance company...
Same thing with girlfriends car a few months back, think it is basically standard procedure now, did you get a cheque sent through aswell. Not that im supporting their (insurance companies) approach but I can see how it has probably saved them a lot of money as for a lot of cars people will just cash the cheque and be done with it.
BTW I *think* if you did get a cheque your ok to cash it and still refuse the offer, any additonal money agreed on will be sent out, but please DONT take my word on this, just thought it might be handy