I'm wondering if this was done, not so much for this particular situation, but to be careful and not set a precedent of allowing a victim to be paid twice.
I think it is easy to jump on the insurance company on this one (it makes great media) because the sitaution is so terrible.  But the way our system is set up, this could (correct me if I'm wrong, lawyers) set a very costly precedent when the situation is not this dire.
Just trying to throw some contrarian banter out there...
:0corn