Your experience was typical and, as you discovered, the insurance will eventually pay you something, but they are not concerned with the importation of your car or clearing it from the records; that is up to you. In most such cases, there are only two remedies: Importing another car in your spouse's name or buying a Mexican vehicle.

__________________
Read "Streets of Glass" to discover the experience of a retired couple's permanent move to Lake Chapala, Jalisco, Mexico.
PM for details.