Sounds to me like you did the correct thing, not your fault they don't want to listen. Some people choose to remain ignorant. You handled it well, and Gracie was a perfect lady. (((hugs))) to you & your gorgeous girl.
I'm really taken aback. I have had people ask if Star is a wolf or wolf hybrid, but NEVER has anyone be so rude as those people! Most people I encounter want to pet them and just want to be sure they are friendly. As Glacier pointed out, there is some prejudice by some, but not all, insurance companies. But at our previous house, before they would insure us, they came out and took photos of Star and Rosie, my RB rotti-mix, "just in case".