Wrecked the Valiant. Pictures here.

Here's a '68 for you. $3,500. I'm not saying to blindly accept the valuation, I would make the insurance company justify it too. Even another $500 would make a big difference in replacing the car. They might be a little low for the shape that your car used to be in, but unfortunately I don't think they're being unrealistic. Granted, this one is in California, and rust free cars don't fetch as much here as they do in places where rust is more of an issue.

http://fresno.craigslist.org/cto/4975421558.html