ANSWER

The insurance company is required to pay the fair market value of a vehicle. The fair market value of your vehicle can be found by surveying dealers in your area, receiving information from recognized groups such as "CCC", "ADP AutoSource", or one of the industry guides, such as "NADA" to determine the average retail price. When disputing the insurance company'es offer of settlement, it is up to you to prove that your vehicle is worth more than what is being offered.
The insurance company will adjust the value based on the physical wear and tear as well as any pre-existing damage. If the insurance company determines some replacement items are better than the ones damaged, they may apply "betterment". Betterment is an improvement that increases the value of property and is more extensive than mere repairs. You would be responsible for those charges. For example, if the tires are damaged or the bettery or mechanical parts must be replaced, the company may replace new for old. The betterment would depend on the age of the older item being replaced.