Why can't he claim the excess, or come to that the full amount from his neighbour? Does he have legal protection? If so a solicitor will act on his behalf, fees paid by insurance.
Hire cars are usually provided by repairers as part of thier "Approved Repairer" deal with insurance companies, then only whilst vehicle is repaired, not if it is a total loss.
Settlement values for vehicles are negotiable, if he feels the offer is unreasonable then suggest contacting ombudsman.