Insurer totaled my car and offered $4,800 below KBB - is that legal and can I fight it?

Got rear-ended pretty badly two weeks ago. My car is a 2019 Honda Accord with 61,000 miles on it, in excellent condition. No accidents on the Carfax, new tires put on last spring, recent brake job. I take really good care of it.

The other driver was at fault, their insurance accepted liability, and then sent me a total loss settlement offer of $17,200. I looked up the KBB value for my exact trim, mileage, and zip code: $22,050 for a private party sale in "very good" condition. Even "good" condition comes in at $20,400. The insurance offer is $4,800 below the lowest KBB estimate for my car.

I asked the adjuster how they calculated the value and she sent me a "comparable vehicle report" that shows comps from neighboring states and some of them are base trims with way more miles than my car. None of them are actually comparable. I know I can reject the offer but I have no idea what leverage I have or how the process works after that.

Can they really pay me less than market value? Is this normal or are they lowballing me? I need this resolved soon because i'm still paying on this car and my rental coverage runs out next week.