What can I do about this "betterment" charge?

I was rear ended 2 weeks ago while sitting at a red light. The girl just wasn't paying attention and didn't get stopped on time. I called the cops & the other driver claimed full responsibility. I drive an 07 Hyundai Tucson and while the visible damage was just a few scuffs on the bumper, the accident actually pushed my entire exhaust forward and is going to cost somewhere around $1,700 to fix. I made the claim with her insurance company and things were going smoothly. Until the appraiser's report came back deducting $145 from what they will pay for betterment. I understand the theory behind betterment, but what I don't understand is why an innocent party in the accident should pay a penny towards the repairs. I've already been inconvenienced first of all being hit with my baby in the car, but now having to take my car & have it in the shop, etc. Not to mention the POS rental car they gave me that so small that it is practically a deathtrap on wheels. The betterment is on my muffler...Ok, great, I get it, car parts get wear & tear. BUT...it didn't need replaced or repaired until someone HIT ME from behind! What type of recourse do I have? So far I've talked to the appraiser & her insurance company and have gotten nowhere. Tomorrow I plan to call my insurance company to see what they can do for me...I also plan to report them to the NYS Department of Insurance & the BBB if it comes down to it. But I really just don't want to pay the $145. I just want my car back the way it was.