When did this start happening?

I'm making a claim because someone reversed into my motor whilst parked. It's actually all very amicable, I've known him for years and he admitted the bump and it was on private property.
The claim's proceeding nicely ~ assessed, replacement vehicle on the way etc ~ when out of the blue his insurance company phone me up offering to put right everything, repair, provide hire car etc and... get this... imply that I might be liable if the value of the hire car is greater than equivalent to mine! Eh?

Having told them politely to bugger off and deal with my insurance co. they then send me a letter today detailing their offer again!
Whilst the assessor was here this morning I asked him what he thought. He said they're all doing it now, trying to save costs by putting the work through their own network of repair shops and vehicle hire companies rather than paying out to another insurance company.
I have no problem with them running an efficient company and monitoring their costs, but when they start saying that declining their offer may result in me
failing to mitigate the costs and
end up in court... it sounds threatening...

Well? Anyone else had this?