Can the AWD sensor be damaged/jarred enough during a collision to trigger lite?

What is your question?

In a recent collision at which point my AWD disabled light came on. Repair center says that it was triggered due to a bad calibration sensor. Since there was no damage to the outer housing unit, the insurance won't pay for the diagnostic, or the repair. Can the AWD sensor be jarred enough to go bad/blow/or whatever would cause the sensor to go bad? I also had serious damage to the front tire, wheel, and suspension from the collision. It just doesn't seem plausible that it mysteriously went bad at the exact same time and that its not related to the wreck. I appreciate any help. Thanks