You have to understand that in many jurisdictions, officers at the scene are required to include an estimate of the damage in their report. This is sometimes used by the district attorney to decide, in part, what charges, if any, are to be filed.
They generally are very conservetive in their estimation of damages, as overstating the damage can open a real can of worms from a litigation standpoint.
Nobody expects them to be experts, and most officers that I've discussed this matter with would be overjoyed to see that requirement go away. I'm sure the assessment was based on a very cursory look at the car, as most traffic officers have neither the time nor the inclination to examine a damaged car in any detail. Nor should they, as that's what the entire loss claims process is for.
This is based, again, on my discussion with several different officers from several different departments, and is not to be construed as being the status quo in all locales.
From a repairer's standpoint, everybody expects that the damage will be more than the estimate, but vehicle owners become very suspicious when the repair is less than the estimate. You'll either be accused of not repairing correctly, or trying to gouge.
Add to this, that many NOS parts were documented to have been installed, and if they were sourced from the vendor I would suspect, were priced considerably over what a good used piece would be. This will drive up the cost considerably (rightfully so).
The general public has no idea what it costs to repair a car, let alone a specialty or collectible car. Had a guy this week that thought getting his 2003 Altima painted complete at Maaco for $750 was a bit high. REALLY didn't like our estimate.
