£700 worth of damage just before I re- registered it. His insurance
would not pay the cost of the repairs, only their estimate of it's
value of £500, so I had to cough up 200 quid, to get the car back.
This does not seem fair as it was not my wife's fault and I feel it
should have paid up

If the crash damage had cost say £7000, instead of £700, I'm sure you'd
have agreed it would be daft to repair the car. You do have to mitigate
your loss. So, you can't expect more than the replacement cost of the
car. But that can be the price off a swanky dealer's forecourt.

I doubt that anyone can say within a couple of hundred squid what the
car was worth. If it's not too long ago, you can still complain to the
Financial Ombudsman Service that the car was really worth over £700.