The neighbor is now saying that the car was stolen when it hit my daughters house, therefore, my daughters insurance representative is stating that the neighbors insurance will not pay due to this. Is this true?
It may be true, but: 1) the insurance representative is probably not a lawyer and, therefore, is not qualified to express an opinion on this issue if that is what he or she is doing; 2) if the insurance rep is not opining, but rather stating what the adverse insurer's rep has said, then your daughter should not assume this is accurate, but instead communicate directly with the adverse insurer's rep on this. If he or she confirms that the insurer's position is that there is no coverage under their policy for her claim and refuse to pay, your daughter should promptly consult a lawyer for advice and counsel on how to proceed.
Again, I wish you and your daughter good luck.
Thank you so much! You have been very helpful!