Auto Insurance Claims: School parking lot incident, pre-existing damage, repair person, evening march

Question

Nissan Rear Quarter Da My daughter who just turned 16 in January of 2009 was pulling into her parking space at school, and her front bumper scuffed/hit the rear quarter of an older model Nissan around Feb 20th. I talked with the young mans mother that evening and she agreed not to submit it to the insurance company and let me take care of the repairs. I was assuming after looking at my daughters minimal damage that it would not take much to repair. The young mans mother went to two body shops (unknown to me) and got one estimate that was really high (she did not say how much) and an estimate of around $1000.
She said that her ex husband worked in a shop where he could fix the damage and I would have to pay them only half of the low estimate so they are requesting $500. I had been laid off for many months from work and finances were tight so I contacted a mobile repair person I learned of from the local car dealership to come and look at the damage to see if he could fix it. He immediately told me that he could fix it easily for around $200 and also informed me that there was preexisting damage on the rear quarter just above the area where my daughters bumper made contact. We took pictures and did measurements. I called the mother and told her that I could have the damage fixed and that would include the previous damage and could be done for around $200. I did not hear from her about getting the repairs done for over two weeks. This evening, March 30, 2009 the ex husband called me and said that the mobile repair person was unacceptable and he wanted the $500 or he was going to turn the accident over to the insurance company. I asked him about the existing damage and he claimed he was not aware of it. I took pictures on March 7, 2009 (see attached picture) of the damage and it is clear that the previous damage was much worse than the scuff from my daughters bumper. Different color vehicle and higher than our Cobalt's bumper and a serious dent that I believe they are wanting me to fix.
Looking for advice... should I report the claim and let the insurance company dispute the existing damage with them or should I try and pay the people the $500 that they are requesting since they did not report the accident in the parking lot however money is still tight due to the layoff. If I let the insurance company handle this I fear that my rates for my 16 year old will go higher than what they are already. I can send pictures if that would help.
Thanks
Jack

Answer
Hi Jack,

Based on the picture, it will be difficult for anyone to say that there is pre-existing damage because of the close proximity of the damages. If a claim is made against your insurance, it would be considered an at-fault accident for your 16 year old daughter which could raise your premium as much as 40%.

You should do your best to negotiate the best deal you can. Perhaps you should offer to split the difference between the $200 & $500 offering to settle for $350.00. What ever figure you agree on you should not pay anything except in exchange for a signed release form. That way they can not come back for more or then try to make a claim on your insurance.

I hope this helps
Richard Hixenbaugh