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I am sorry to hear this.
The driver of the other car is liable as they rear ended your daughter's car.
So she was ill advised to say she would pay for her own damages. That is not what should have happened. It may also be taken as some sort of admission of fault.
The agreement may be binding if your daughter can prove it but the argument against this is that this kid was pressured or scared and agreed.
So you should be answering the insurance company with a response that says not only was there this agreement but in fact their driver rear ended your daughter and so they are entirely liable and you will defend any claim if necessary.
It is an serious offence not to have insurance on the car and have it driven. They may report this and there may be charges unfortunately.
Does that clarify the law?
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