Pay for a Stolen Car??

My husband and I had a car with JDByrider. They did the your whole car payment cannot be late blah blah blah...until they lost a payment. Then it was oh its okay that you are a payment behind (which we were not). Well we all know how awful the customer service can be, but I think this tops the cake. We have 2 cars and we had let a "friend" (not really such a friend we found out) of ours borrow our car for a week or so... she would make the payment for as long as she had it, which to me was fine. We have a 06 Pontiac (not from JD) and a 95 Chrysler Cirrus (from JD). Well we let her borrow the chrysler and she had it for about 2 weeks. Well about 2 1/2 weeks after we let her borrow the car we get a letter saying that it has been impounded and and the person was arrested. We immediately called her to find out and she said that the car had been stolen and she didnt know how to tell us. So we called the PD to find out the details and then JD to tell them that the car had been stolen and in an accident. They tell my husband well you still need to pay for the remaining balance on the car. He continued to tell him that insurance should pay for it and that our insurance would just have to go up, and that is our problem not his. Now they are harassing those on our friends and family list because we refuse to pay for their car. They threatened my husband telling him that they would take him to court and take everything that he owns. WHAT COMPANY SAYS THAT...when we called our insurance company to find out if a claim had been submitted and they told us that the claim was submitted before insurance was renewed so there for would not be covered, but at that time the call was made insurance was fine. GGGRRRR