Unfortunately you are in the situation that no doubt many have found themselves in previously.
My understanding is that this is standard policy for the budget spanish car hire companies
Basically if you have a bump they take the money for repair from you until they are compensated by the insurance company.
Problem is how and when do you know that they have been compensated?
Once they have your money do they care? probably not.
I suspect you will have to chase this hard through the broker to get anywhere.
One suggestion is to call you credit card company if you get no joy from the hire people. Since a ruling in 2008 you have the same protection overseas as you do in the Uk with respect to goods and services purchased on a credit card. "They are jointly and severally liable. "
In other words your disput is with the card company as well as, or instead of the hire company.
Have done this myself, in a different situation in Spain and the card company resolved it.
If you want more details PM me.
Good luck in getting this resolved.