there's no resson for you to admit something you did not do. the other driver has no actual prrof that you hit his car ... unless he lies. does parking lot have surveillance? you should have taken pics ... might have helped your case. report to your insurance company and tell them everything.
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Tell your insurance company what happened. You are in a bad situation here because the police officer sided with the other person based on what he observed in damage, and will probably need to take care of it.
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I've seen this mistake many times before. You should have just given him your insurance information and dealt with it through the insurance companies. Instead, the police got called and you now have a traffic collision report sided against you!
Sounds like your options are to pay it yourself or to report it to your insurance company. This is why people buy insurance. They will investigate and detemine if you caused the damages. They have experts that will compare the damage and investigate the incident to determine if you caused it or not.
You can try fighting it alone, but unless you have access to accident reconstruction experts and other auto accident it will be a very diffucult and uphill battle to do alone.
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The attitude of the police officer was pretty bizarre. It is not their place to suggest a cash payment. Other than that just cooperate with your insurance company.