Jay, you most certainly will be able to buy it back.
Insurance companies are always looking to make money,fair enough it's what businesses do. So, when they offer you something they are going to offer you a low amount and on the other hand charge you top whack to buy your car back.
Definately haggle more money out of them and buy your car back for as little as possible.
The Mondeo I had which I bought back cost me £60 to buy back. I stil have a few odd parts left which I keep meaning to ebay. So far made about £750 from parts though! Also, they offered me £900 for the car (that's what I paid- they never knew this though) and pushed them upto £1100.
Best of luck and keep us updated, how are you feeling (medically and emotionally)?
How is the passat, a little different from a 205GTi no doubt!
What I would do (knowing you want another 205) is buy any old 205 which has an immaculate or near immaculate body. Strip it all down and prep it all. Then, from all the bits you flog pay for the car to be resprayed. Transfer over all your existing shiny bits and you will end up with an immaculate 205.
OK, so not as simple as that but you get the idea.