Void insurance policy trying to reclaim money

pvt

There's every possibility that the 3rd party informed their insurer they had been involved in an accident, even though they felt no damage occurred.
That insurer in turn passes their insured's name to their favoured ambulance chasing legal firm (for a backhander), who in turn persuaded the 3rd party they had actually broken their spine, not realised that one of the children in the back had been killed, or suffered a complete emotional breakdown. Hence the subsequent claim.

FlameCloud

The policy will almost certainly give insurers the right to settle claims as they see fit - it is after them who will (normally) foot the bill. In similar terms, the clause about recovery from the insured if they have to pay because of the RTA is also equally prevalent.

I suspect the insurers must surely suspect deliberate fronting to have voided it.