Medical professionals have indicated that my wife should not be driving because of her dementia. I have taken the keys away from her but it continues to be a continual battle front because the wife has enough awareness of what is going on that she thinks she still should be able to drive. This has become a major issue of confrontation between us. Insurance company has said we could lose everything if she were to get in an accident regardless of whose fault it was because of her dementia diagnosis. How can we put this issue between us to rest for once and for all and get on with our lives as best we can?
I wouldn't fret about trying to settle the matter between the two of you. If her brain was able to properly process it, then she wouldn't continue to bring it up. She can't reason it out. If she could, she would. I would focus on having a very tight security for the keys that totally prevents her from having access.
I would then redirect her questions about driving. You might even say you are waiting on some tests results before she can regain her license or that you can only afford insurance for one driver. Anything to put her off the topic. It may not matter if she gets upset, because she won't likely remember the conversations after a while. I would hope that eventually she will forget about the driving.
I admire your optimism and desire to move on with your life together, but with dementia there are likely to be many problems as her condition progresses. Some patients wander, are combatant, resist care, etc. and there are no simple solutions. Sometimes it's a trial and error of how to deal with the behaviors. My cousin had quite a few odd behaviors, but she did give up driving on her own. (She got very scared once when she forgot how to get out of the car.) She then said she wanted to sell the car and I agreed.
I will say that some behaviors may decrease or fade away completely. I hope that can offer you some comfort.
The driving issue is one of the most difficult things about growing older. The Dr.'s know she shouldn't be driving. You know she shouldn't be driving. But it sounds like there's no convincing her.
I have no idea how to put this to rest between you. I can't imagine what you might say that would enable your wife to, all of a sudden, realize that she shouldn't be driving. That she could get in the car and injure or kill herself or other people isn't convincing enough for her. That's the disease.
Hide the keys where she'll never find them, blame the Dr.'s, and hope this passes soon.