Driver crashes into my car, pays for repair costs in cash at the scene, but now wants to claim through insurance and get his cash back

Two weeks ago a car without lights pulled out of a side junction suddenly with no indication and struck the front passenger wing of my car. My wife who was driving swerved to avoid contact but the other driver did not see us in time struck our car. He then drove on. We took his registration number and then stopped to assess the damage to our car. As we did so the other driver also pulled up. He admitted full liability and we exchanged details. The other driver was severely disabled with no upper limbs so we had to write out both sides details, although not insurance details. He then stated that he did not want to involve insurance companies as he was due to part-exchange his car for a new one in a couple of weeks and it would take far too long to repair it through the insurance. We wanted our damage to be fixed ASAP as we had our car for sale. Then a witness pulled up asking if he could help and at this point the other driver took out an envelope and gave us money to cover the cost of our damage. We felt the amount offered was sufficient so said to the witness he was not required. On our way home we reported it at a police station (which the other driver did not do) but was told that it was not necessary in this case. We have had our car repaired - it was only minor damage - but now 2 weeks later the other driver has phoned saying that he has changed his mind as the quote for his damage was more than he expected, and he wants his money back and now wants to make a claim through insurance. Can he do this now? He took 13 days to contact his insurance company, our car has now been repaired, so what should we do?

You should write to him to say the matter was dealt at the scene in accordance with his wishes. In your view you should state that him paying you was an admission of liability. The accident was his fault and you will not return the money as you have already expended it on repairs to your vehicle. Whether he chooses to claim for repairs to his own vehicle by using his insurance is of no concern to you.

You should report the fact that an accident has occurred to your insurers straight away and detail the circumstances to them but stress you are not seeking to make a claim on your policy. This is effectively a self-protection measure as if in the unlikely event he issues proceedings against you, your insurers will need to cover the costs of defending any proceedings issued against you under your motor policy.

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