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What a nightmare!
Jonathon's Towing may have suggested using auto insurance under the assumption that they would be paid more than the negotiated AAA fee, not sure. Regardless, if AAA ordered the tow, then it should have been done under AAA. You should file a complaint with AAA.
It is reasonable for a tow company to make sure that the car really does belong to the person who's bailing it out. It is not reasonable to go around and around with you about this. I am sure that there was a police report regarding the accident and if the car had been stolen, then that would have showed up then and the rightful owner would have claimed it.
I imagine that tow companies must be licensed in CA; I would enquire with that agency about whether their actions were required by law. I don't think they were but you can check.
In my opinion Jonathon's has unreasonably bumped up the claimant's costs through refusal to release and through failing to honor their contract with AAA. I believe that you should be reimbursed the storage costs as requested, particular since you had to pay cash for the original tow through their fault.
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