Easy to say it is totaled.
With the current book value of an e30 (other than M3) ANYTHING will total our cars.
A paint job is worth as much as most of it them to the insurance company. So any real damage at all is a definite total unless you have a fair market value assigned to the car.
They could care less how much you like, how difficult it is to find another or how rare the car may be. To them it is cheaper to write it off than fix it.
If you want, do a buy-back from them then fix it yourself, however, keep in mind, that you will end up with a salvage title. Even if the car is restored to perfect condition, making it worth even less.
If you do buy it back, make damn sure the chassis is not tweaked, it seems that the e30-'s weakpoint is in front end collisions like you had. Roll it, or slide it into a tree, it will survive and save you, run into something, and it is toast.
Any car worth less than $4000 is almost always going to be totaled if anything structural is damaged. Under $3000 if it is an odd color and scratched (BMW paint qualifies here). Under $2000 will be totaled if it even needs body work. That is just how it is.
Body work is way expensive these days.
Why they say it does not need to be reported if damage is less than $500 is ridiculous, there is almost no accidents anymore that qualify. A 5mph bump on a new car is a $25000 accident MINIMUM and some cars a 5mph bump does over $5000 in damage, and no, that $5000 was not on an expensive car.
This is before you deal with the engine sliding, fixing the fenders and more importantly, the airbag.
Sorry to say it but your car is toast.