Funnily enough, I've also just been through the same situation.
When the poor Zed got hit a few months ago, 3 large chunks got taken out of the wheel.
There was some minor, pre-accident scrapes on the edge of the rim, thanks to a moment with a gutter :Oops:
I offered to contribute a reasonable amount towards the cst of repairing the wheel but the assessor said there was already some damage so they wouldn't fix it at all.
After some *heated* and *interesting* discussions with the insurer, they have agreed to pay for the repair.
The point we kept making was that the wheel was damaged in the accident and the insurers involved had a responisbility to ensure all damage was fixed and we weren't disadvanataged.
If they can't repair your wheels to their pre-accident condition, they need to offer you a complete set of rims to the same value - you can't be left worse off because of the accident.
If they're still giving you grief, try http://www.dispute.com.au/htm/youth07022001.html
Haven't tried them myself but heard they get results.