OK.
In reply to your original question regarding insurance : I'm pretty sure you are responsible for insuring it at present. I'm not sure, but I don't think you have a legal right to just unilaterally reject the car, especially if the dealer refuses to accept it. You'd have to go to a court Small Claims Court) to force them to accept it and refund you.
As to informing DVLA ... well, you seem to have jumped the gun a bit.
I'd suggest you need to calm down a bit, and possibly try to get someone neutral and who can keep control of their emotions to try to deal with the garage. After your first rejection, and then more problems, they've probably pegged you as a right pain in the backside, and they're just sick of having to deal with you.
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