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I don't think it has anything to do with "self respect" or feeling guilty for accepting a payment. I bet if this happened in the church parking lot, the church's insurance agent would be contacting her to do the same, and if it happened in your own driveway, you could either pay for it all yourself, or call your insurance agent.
It sounds like there was some legitimate pain and suffering, and now the hassle and worry of answering questions of the insurance company representative, all of which is aggrevating to a 79 year old woman (hell, anybody).
It sounds to me like they made a low offer to hopefully make this go away cheaply and congratulate themselves on thier good fortune. I'm not saying you should ask for the moon, but they are prepared to pay 3X that amount without questioning it. This would help your Mother for her discomfort and aggrevation.
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