Car Totaled In An Accident, Insurance Company Not Offering Enough, Local Market Value?

A friend of mine recently had his car totaled by a reckless driver while it was parked outside his house. There was a police report on the incident and it was passed along to the at fault motorist’s insurance company. They used CCC in order to come up with what they consider to be a fair value for the car and they will not budge from that number.
Our major issue is that in order to come up with their offer they used the local market value of five comparable cars and came up with an average based on those values. This seems like a perfectly fine method except that the closet car used to determine the local market value was over 1,300 miles away and the furthest was about 2,500 miles away. I don’t see how they can consider this a “local market” when these sales took place so far away. It seems as though their offer should also take into account the amount that it would cost to ship any of these “local market” cars to our locale (an average of about $1,200*).
My friend mentioned this to the person handling this claim but they would not give him and answer and said that they will not going any higher than their current offer.
Do insurance companies ever take into account the cost of shipping associated with a vehicles used to determine a local market value? If so how to we go about getting them to increase their offer? I know that arbitration and litigation might be possibilities but ultimately that would probably end up costing us more than the $1,200. Is this something that could be taken to small claims court either against the insurance company or against the reckless driver?
Additionally the insurance company may not reimburse us for the total cost of storage and towing, if this were to happen what would our recourse be?
Thanks in advance for any information you can provide with this issue.
My friend lives in CA.
*determined by using the calculator on transportreviews.com and averaging the cost of shipping the cars from the five states that were deemed to be the local market.

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