Auto Insurance Claims: insurance will only pay 50% of estimit., claims adjuster, appt

Question
11-5-2007 my car was rear ended while my boyfriend was driving through a parking lot. The damage was minimal. He exchanged information with the other person and also got information from the 2 witnesses. At that time my car didn't have insurance. We spoke with the other drivers insurance company and was told that they would be getting back to me after they had a chance to speak with their client. The following week I called the insurance company and was informed that they were denying the claim because their client was not at fault. After asking if they had contacted the 2 witnesses and I was told that they would call back. Another week goes by and no word from them. I call again and get the same response. So I call one of the two witnesses to see if he had been contacted by the insurance company. He had not. The other witness hadn't either. I call the insurance company and to find out why the 2 witnesses were never contacted. At this point I am being passed around from this agent to another agent. On Dec 10th I get a phone call from the insurance company asking for my boyfriend who at this time was in county jail for not paying his child support. When I say that he is not here and I don't know when he will be back because he is in jail. They say thank you and hang up.  2 days later my boyfriend is released and he returns their call. And is told that he needed to make an appt to bring my car to their claims adjuster. The appt. was for the following week. At the appt. he is told that they are going to pay for the damage to the car. Their adjuster figures the damages to be $863.71. And he will be issue a check in that amount. But it would take about 45 min to an hour. I couldn't wait the 45 minutes he said it would take. I had to pick my son up from school. So we asked him to please told him to please mail it. The day that we expected the check to come, instead we get a letter stating that the insurance company was only going to be paying 50% of the total damages, because they said my boyfriend took to long on getting back to them. And they proceeded to tell me that the check in the amount of $863.71 was sent out to me in error and that a new one in the amount of $431.86 is being issued. Last Friday I received both checks in the mail. I only cashed the smaller one.
So my question to you is: Can they legal just take it upon their self to reduce my settlement by 50%?

Answer
Hi Cheryl,
No, the insurance company can't reduce your settlement for the grounds stated.
An even larger problem is now an issue.  On the back of the check that you were sent, there is usually a statement above your signature line which is a 'Release of all Claims', which states that by signing the check, you are releasing the other driver and the insurance company against any and all future claims.  By endorsing and cashing the check, you effectively closed the claim and have no future recourse against the driver or insurance company.
I hope this has been of help.
Your feedback by rating my answer will be appreciated.
Sincerely,
Bennie
San Francisco Bay Area