Thanks for the advice guys. The car is actually her brother's that she drives all the time. I talked to him and we came to an agreement.
I am paying his $2k deductible and the difference between the insurance check and the blue book value of the car. Then I am having him figure out how much his premium increase will be and will pay for that. My friend said the premium will probably only go up $200 to $300 a year so I'd pay $1k to $1.5k for that.