Once you have a major collision (and hitting a deer is major damage) you're best to walk away. A few years ago I hit a deer with a nearly new pickup, and did huge damage to the front end. The truck was only about 8 months old, so it was repaired by the dealer rather than replaced. But it never drove the same after the accident. 

That was a vehicle with a full frame. Unibody vehicles suffer even greater damage. This guy should take the money and run, the insurance company knows what it's talking about.