Welcome to the forum Ranjit.
Sorry to hear of your issue and the understandable outcome.
Perhaps you will allow me to offer my comments:-
You don’t tell us the current mileage or anything about its service history and the fact that it hasn’t been garaged over the last 10 years. However, answers to either of these isn’t really going to affect the overall value of the car to a great extent.
I would have thought that a valuation of £2,330 is erring on the side of ‘ you cannot really complain at that for a 21 year old car’.
You say you have it insured for £5,000 so can you confirm that that value was agreed ( in caps) when the policy was taken out, or was that a value figure you placed on it? If the latter then that is meaningless, and ‘ Market Value’ will apply -which it does.
Why not contact the insurers for a figure to retain the car and you then organise an independent repair?
Perhaps you could let us have your comments on the above.
Kind regards,
Gareth.