At Fault Fender Bender, Rental for Victim Not Completely Covered?

Hi,
I was involved in collision where I was cited for failure to yield. My liability insurance fixed the other guys car but only paid for a portion of his car rental while his was being fixed. My insurance company said that he rented a car from a place that they don't have a special rate with and that he paid a non-market rate. Now the guy I hit is asking me for the difference ($600).

Is this a common occurrence or expected behavior from the insurance company?

I asked the person I hit to call my agent directly and if it didn't work out to his satisfaction to contact our state in
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