I used to be a postal clerk. That is standard procedure for an insurance claim. They have no way to determine the cost of damage to any given part and will take the entire item, packaging and all to avoid fraud. They may also demand to see the shipping packaging to prove the damage was their fault as well so remind him to keep that.
Though for $90 back when I still worked there, it could be a local Postmaster decision. Now I think they send everything to the main insurance office which horribly delays things. Don't expect to see your refund for a while. Things also get a bit dicey when they are "collectibles" as well.
I'd tell him it's all or nothing. He has to give it up or he gets no refund.