Sounds like a right farce. Sorry to hear of the aggro and trust my jokey comment earlier didn't cause offense, was just trying to lighten the mood
I can't imagine the insurance company will be interested, I expect in their T&C's there will be something about how long they have to update MID etc. and it won't be instant and that's quite reasonable.
I agree that the seven day producer would have been how things like this were dealt with in the past, IME (had several of them when I was young) but I guess these days they want it all done one the spot to save the time and bother of admin and probably people are less likely to challenge (speeding up the entire process, saving the police time doing things properly). Computers don't 'act reasonably' or 'use discretion', which is what the copper should have done.
Sounds in general like the guy was just bored/an arsehole on the day tbh. It's certainly pretty full on to also charge you for someone else driving your car without (in their view apparently) proper insurance. I always thought it was quite clear that the responsibility is on the driver of the vehicle to have proper insurance - hire companies don't check each person's insurance when they hire them a car for example, only their driving license, so by that means, each hire company should be prosecuted for allowing their cars to potentially be knowingly driven uninsured?!
(Owners liability is for having the car insured/taxed/mot'd etc. if left parked on a public road.)
The only way to change all that though, is to complain, otherwise nothing will happen. They won't be interested in loss of wages and travel costs etc. (doubtless they cant be held liable for reasonable time spent in the course of conducting legitimate enquiries, because they can't manage your time - otherwise the police investigation system would crumble overnight) but I can imagine cost of their pound etc should be reimbursable, if you had done nothing wrong (that's a cost they can manage, because they chose to out it there in the first place and could have chosen not to).