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If he hit it hard enough to cause damage to "rack and pinion steering" then he probably did damage to the lower control arm.
This should be apparent if you compare the one side to the other- typically the arm will be deflected towards the back of the car, the curve in it will be much more severe, possibly even kinked. It should be obvious by studying the arm that the car would not have been drivable with this damage. There is no way to achieve a proper alignment with regard to caster and camber if the arm is bent.
I'd be surprised if the wheel bearing was damaged by this, but it sounds likely that the rim was, and possibly the tire- here, a used wheel will do just fine but you may need a new tire.
The least they should do for you is to replace the control arm and pay for an alignment. As you realize, the book value of such a car is quite low. It doesn't really matter a lot to them if you've recently put $3 or $3000 into the car, it's all dependent on condition. The trick is to get some money for the accident without going above the $ value at which they declare the car a loss. Here, the receipts help- you show that the car was in better than "average" condition. I don't think you could have more than a couple hundred dollar's worth of work there, so you should be OK with regards to any title issues.
You could just ask the adjuster what the value is that they're using as a basis for the car's worth. Good luck!
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Rob Bareiss, New London CT ::: 86 244DL, 87 244DL, 88 744GLE, 91 244: 808K total
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