Hit At Pump, Salvage Certificate of Title, Please Help

Hello, I'm Ark and new to the message board and have a question that maybe someone may be able to answer for me please. I have a 1994 Ford Van in good condition that we use for everyday use to and from work, grocery shopping, heck it's our only vehicle, so it's used for everything we do. I went get gas for my van and parked it at the gas pumps. I went into the store to pay and a car backed into my van. She had insurance and we filed the claim on the damage with her insurance company the following day and an insurance adjuster come out to our house to make an estimate on the damage. The adjuster left and told us she would call us on the next day to give us what they estimated the damage to be. The estimated the damage to be 1500.00 but would only pay 700.00 because of the age of the van and this insurance company says that the van is considered a total lost. Anyway, we disagree with their opinion and told the insurance company we wanted full payment for the damage so we could fix our vehicle...insurance company refuses and sent us this letter along with a check for 700.00. Dear Mr. John Doe, Enclosed please find a draft in the amount of $700.00, which represents the actual cash value of your vehicle, less the salvage value of $401.19. Since you have chosen to retain salvage to your vehicle, per House Bills 2151 and 2599, Progressive Insurance Company must notify the State of Texas that you have done so. The State of Texas will not allow transfer of title to your vehicle until a (specify either: Salvage Certificate of Title or Non repairable Certificate of Title) is issued. If you choose to repair the vehicle and apply for a new title, you must have the vehicle inspected at the DPS inspection station and pay a $120.00 inspection fee. Once you have the document, you will be allowed to obtain a new title which will state the vehicle was previously in salvaged condition. If you have any questions, please call me or call the Department of Transportation. Sincerely, XXXX XXXXXX Claims Representative XXXX XXXXX Insurance My questions is: This Insurance company can't do this can they? We have not signed any papers or the check. This is not their vehicle, nor do they own it. Any advice would be greatly appreciated. Thank You, Ark