You should reply to this letter and give your statement of the facts.
If the company that sent you the letter has subrogation rights, you should deal with this company.
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You need to provide you side of the story. You may need an attorney to help, if the amount claimed is serious.
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You owe nothing unless they obtain a judgment against you. That said, you may well be sued, and it sounds like you will not have a liability insurer to provide you with defense counsel and to pay any judgment. Once the other insurance company has a judgment against you, they can make your life miserable. You may even find your driver's license suspended. You should retain a local attorney to first try to find alternative liability insurance, or otherwise try to negotiate a deal. Contacting the subrogating insurer or subrogation collections firm directly would be a mistake.
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