Auto Insurance Claims: Collision, car windscreen, insurance details

Question
3 days ago i got up for work started my car drove about 25 yards up the road and had to swerve to avoid a cat, i ended up hit the back corner of a car but at a nominal speed, i got out and checked the damage it looked to me as if my paint had scuffed onto their bumper and their bumper had also come out slightly, damagage to my car was nothing.  no-one was around that morning so i left my details on the car windscreen so the owner could contact me for my insurance details.  that night i recieve a call from a lday who advises me the car is actually a hire car and she is just holding the keys for the people who leased the vehicle, I gave her my insurance details and claim no. and thought that would be the end.  the next morning I went to check the other vehicle again for damage and can see no visible damage at all to the car, I have taken sevral photos on my digital camera to show this.  Once I had taken these photos i approached the ladt who was holding the keys and adivsed her there was no damage and could this just be forgotten about, she advised it is not her car i would need to take it up with her neighbours who leased the car, she only visited me last night as her neighbour has a history for violence when intoxicated, which he was at the time and she wished to act as a mediator, i went about my business and continued to work, that night th same lady approached me when i got home and said her neighbour had told her to say if I give him $200 cash he will say no more about it to the hire company, I said that I would rather th einsurance ompanys handle this as i'm not sure i can take his word on the matter and it was left there.  The next day i got up for work and found a note attached to my car saying ' dear graeme, my mate is picking the cart up on saturday to fix and i need $400 from you for the repairs, just put the cash through my door and you won't have to mention the incident to anyone, if you don't do this it iwll end up costing you a lot more let me know as soon as possible - mark.  
i have myself decided i wish to go through the insurance as it will cost me less than he's asking for to fix mine and his lease car, but does he have the right to say no more will be said when the vehicle is not actually his?? he also will not give me the details of the hire company or any insurnace details, it seems as if i'm doinf everything by the book and this guy is trying to screw me.  also i'm slightly worried about repucussiond if i do not pay him what he asks.  should i see his note as a threat or a neighbour trying to do a good dead??  any help wpuld be greatly appreciated

Answer
You need to remove all personal involvement from this situation and insist that these people deal with your insurer only.  Anything that you pay them will only be money out of your own pocket as they will inevitably pursue your insurer once they've depleted your funds.

Good luck to you and let me know if you have any other questions.