could have one solution which is to get my insurer to list car as a courtesy car that would be covered on own insurence.

Could be two problems there.

First one is by not telling an insurance company the truth you would be leaving yourself wide open to being accused of fraud if something went worng and being left with a hefty bill, a fine, points and a criminal record. It would be very easy for the insurance to tell, a courtesy would be owned by a dealer, a hire car by a hire company.

Second is your insurance will only cover you for a very a limited period, ours is 5 or 7 days. Not much use when you are going abroad I would suspect.

If you cant get insurnace cover you cant go, least not in the courtesy car. You can argue its a situation beyond your control so I would be tempeted to consider canceling the holiday until the claim is settled, and of course seek to recover the cost from the 3rd party along with adequate compensation.

Or....maybe find someone who will hire you another car and provide european cover and throw the bill back at the 3rd party. Of course you would have to prove all the holiday arrangements were in place.to be in with a chance on this one.