Sixt damage - excessive repair charges
Are they require to make repairs? The damage has already been done in the form of loss of value to the vehicle.
Impression I get as a foreigner after speaking to a German colleague is that after an accident you get reimbursed for the "full retail" labor/parts rate from an estimate and whether you make the actual repairs or what the actual cost of the repairs are irrelevant and pocket the difference.
In the US, the insurer will give you a check for their estimate and whether you carry out the actual repairs is also irrelevant.
I would guess that for most renters that if their insurance over the bloated estimates, no one will bother questioning the practice.