The insurance company can do that. They base your insurance on what kind of car you have and how old it is, and unless you have GAP coverage, they'll only pay you what it is worth.

You might be able to take the other driver to small claims court though to make up for any extra that you might owe GMAC. I doubt it would work, but it might.

You can always look up on http://www.kbb.com/ what the retail value of your car is. Chances are it is around $6000 or so. Depends on miles, condition, options, etc. And if your insurance company quotes it lower than what the website states, you can always argue it with that as your source.