Mr.Harry, that is why, General Insurance (Non-Life) is different from Life Insurance. In a Life Insurance Policy, you get a sum insured on any unfortunate happening, even if you have more than one policy, you will receive the Sum Insured from all of them. BUT in General Insurance, whatever may be your Sum Insured and even if you have Coverages from multiple Insurance Companies, YOU WILL ONLY GET INDEMNIFIED FOR THE LOSS AMOUNT.
Here in your case also, they are just indemnifying you for the ACTUAL LOSS/DAMAGE occurred to you.
If you take my opinion, for such a small amount, its not worth complaining......Though if the argument is done intelligently and by a knowledgable professional, chances of wining the argument is there but You may end up spending more time, money & efforts than what you are claiming for.
Thanks & Regards
Adv. Abhishek Sinha | Mumbai | +91-7045949997