Should I accept a 25,000 settlement from my underinsured motorist coverage, or sue them for bad faith, or can I do both?

I accepted a $50,000 settlement from the car insurance company of the immigrant who hit my bicycle June 23,2011. I had increased med coverage on my policy from 5,000 to 25,000. Medicaid (I am disabled now) won't pay until car insurance pays. I expected $50,000 underinsured motorist plus medical bills, but they are subtracting 25,000, partly for medical bills, and partly because they claim part of my disability was pre-existing. I was maintaining an A+ average in a master's program prior to my injury. I flunked my last class twice. I owe 70,000 in school debt. I cannot work due to a number of problems, one of which was a pre-existing condition that was made worse by the brain injury. Because my car insurance refused to pay for neuropsychological testing, it is possible they caused my permanent disability by preventing the testing that could have resulting in early treatment to stop a cascade of dying neurons.