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Car Insurance Advice

Hi
Totally new to this. Can anyone please, please help. I was involved in a very minor 3mph nudge. Despite there being no damage whatsoever to the claimant's bumper (and him agreeing at the time) the other driver 'claimed' on my insurance for a new back bumper. My insurers said because I did not have commuting in my policy (and was driving to work) I was 'uninsured' (which i understand). They said they would get back to me in 10 working days and was told either they (1st Central) could represent me or I could represent myself. They got back to me 6 weeks later. I was informed they had ALREADY paid out £2,000 and would need me to reimburse them, plus car hire costs). They sent me the consent and indemnity form AFTER THEY HAD PAID OUT. They've admitted this was an administrative error.  I was never informed of any details, I was not asked for the photographs I have taken. They now have these details but all AFTER they have paid out. The claimant used a third party road accident company, NOT his own insurers. 1st Central keep quoting Article 75 to me. Basically,  can they pay out the money without my permission or authorisation and then expect me to pay it back?? I told them I would have disputed it. I'd have taken my own mechanic and engineer to assess the so called damage. I could have negotiated where the car was repaired and discussed the costs etc. I just can't believe they can pay out WITHOUT any contact with me whatsoever. Where do I stand? Can anyone help or advice. I have taken the issue as far as I can with 1st Central. Thanks in advance. 
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