I had similar problems with Avis Catania earlier this year, booked through BA - just the unwanted insurance in this case, I have the Insurance4carhire (25% cashback through Quidco...) I got in touch with BA Holidays on their 24 hour helpline and they were very helpful in persuading Avis Sicily to cancel the insurance and the charge. Ironically I needed to pay for some damage on return and Insurance4carhire were very efficient about repaying the charge once they had the complete paperwork.
Have a go with BA Holidays - BA are after all a big client of Avis and they have some clout.