Never pay anyone directly, especially without a release, because the person could keep coming back for more money. Let the person take you to small claims so actual damages can be proven. Always good to get a free consultation from an avvo lawyer in your city as well.
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Fully agree with previous answer; it is very dangerous to pay anyone anything, even a nickel, without getting a full final release of any and all potential claims. Otherwise, they will very likely come back to you for more. You should not accept the insurance company cancelling you after the fact. In the jurisdictions in which I practice this is an unfair and deceptive practice and also violates state insurance regulations. I would both report them to the insurance commission or other regulatory agency that has purview over insurance companies in your state and also retain an attorney to help you with both matters.
The "stopped short" defense is rarely effective because all motor vehicle operators have a duty to drive in control at all times and to keep a safe following distance. But, you should not be taken advantage of in terms of paying for old damage or paying for extensive, overly expensive repairs.
The sudden stop defense is rarely successful in court. The cases where the defense is successful usually involve some other serious problems with the plaintiff's case. The good news for you is that the property damage is relatively minor. This also may be a situation where the owner of the car did not have collision coverage because his vehicle was old and it did not warrant the expense of the coverage. If there is insurance coverage for the car that you hit the insurance company may consider the out-of-pocket expense for the repair to be too small to warrant the filing of a law suit against you. Likewise, if the vehicle was not insured the car owner may not find it worth his time to pursue a case against you. If the car owner claims personal injuries then the owner would likely include the claim for the property damage. If such a claim is pursued you should consult with a lawyer to consider your options.
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