How to settle car insurance claim?

Hi, my hysband had an accidenta few months ago and we had no insurance at that time. It was cancelled since we missed payment. We are in very bad situation financially. The other insurance co. sent us a letter asking for $3900 not sure how they come up with that amt. The car tt got hit is minor hit on the side. They threaten to send it to the attorney for collection and revoke my husband driving priviledges and report him to public safety. I have sent them letter like the one in this forum to settle for less but they did not want to settle. In fact they reply the letter and ask my husband to sign the promissory note to confirm the debt he owe for $3900 and return it within asap. I also asked for the appraisal / how did they come up with that amount but they never inform us. My questions are can we settle the amt for less, how to do it? If i choose to make payment i do not know how long it takes since we hardly have money left after bills, How to ask how did they come up with the amt? and usually will they provoke the DL if they report it to public safety? Thank you !! I really appreciate any help !!