So i need to pay the compensation?

Hi 13th Dec morning 0730 i was driving to a friends place ( 4 wheeler) , Suddenly a vehicle (2 wheeler) came right in front of me. Seeing me suddenly in front of me the driver of the two wheeler applied his breaks and his vehicle skid, and he fell down. ( Our vehicles did not touch each other) We both were at a speed of 20 kmph not more for sure. I chose to ignore the incident as i perceived the same to be too minor. As a result of the skid his vehicle got a little damage and scratches, though the driver was well and standing ( probably minor injury may be a scratch or something.) This guy chased me to the friends place and had my phone number. Now he is asking for a compensation for the damage - I have asked him to claim it from the insurance firm. He says a police complaint will be needed against me. We said fine. We went to the police station and police advised the other guy to complain with the medical certificates and all. etc etc if I dont opt for settlement. My question is, he has asked for nearly 3000 damages which I suggested to route through insurance claim. is it a decent thing to do? means what will be the repercussions on me if he files a complain against me. Should I settle it outside the court. What if he forges false medical bills? and traps me in the case? I was not at fault any which ways it just that his vehicle skid because he suddenly applied thee brakes. Our vehicle never touch or impacted? Still do I need to pay the compensation. Both were on the middle of the service road which is a two way road.