Coverage & Claims
I'm sorry for the difficult situation. If the towing company damaged your vehicle, then they would be responsible for paying for the damage.
Your best bet is to contact the insurance company with proof the very was repossessed at the time you claim. They may be able to refund you the amount that was deducted from your paychecks.
Car Insurance Costs
Since you no longer have possession of the vehicle then technically you could cancel your policy. It's important to keep in mind, though, that if you have been continuously insured for 6 months or more you will lose a discount if your policy cancels.