washing machine indesit wc6125

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Our washing machine of 3years needs a new motor it works ok but makes quite a loud rusty noise when washing, we have taken a cover plan with D & G insurance while back, after the engineer inspected our Wmachine we have been advised by our insurance that the cost of repair is too high and they r offering a new one as a replacement, after a few e-mails back and forward with our insurance to clear some of our queries, they are demanding us to pay 50 per cent of the cost of a new w/machine plus delivery costs plus disposable of the old one. We have refused their offer and asked them just to fix our machine but they say its on our terms and conditions. We find their information very misleading, when they offered as a new washing machine of the value total ... they clearly stated free, i realize nothing is for free but should'nt they just repair our washing machine no matter what costs ins't this why we take a cover in the first place?
Please advice.
Thanks
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