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Car insurance claim handler suggests inconvinience payment

Hi All, I am new to this but today my wife got a call after being in a small accident 2 weeks ago. Unfortunately we cannot prove it was the other drivers fault and it has gone down as "knock for knock" We have decided not to claim as the damage was so small it would not be worth it as it would only cost £200 to repair.

However we have had a call today saying that we could claim from the insurance company for an Inconvinice payment and we could get £2900? This seems to good to be true and certainly not legal, but they are sending the paperwork for us to fill out does anyone know what going on as I have heard all sorts of things on the TV saying that insurance companies refer there own clients in this way for injury claims as they get a refferal fee - surely this is not legal - any advice?

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