Car Insurance want me to sue. Should I?


I have fully comprehensive car insurance with LV. It has no claims guarantee protection.
A while ago I was involved in an accident and LV consider that I am not at fault. My car has been repaired and that, I thought, was the end of the matter. It turns that they have been unable to claim the money back and so want me to make a claim through the small claims court using a solicitors that they have appointed to recover the cost of repairs (about £1,000). This seems a bit odd as I am not out of pocket at all. The claim says that the value of my car has been reduced by the value of the repairs which also seems odd.
What do you think? Should I go ahead as requested or refuse? Could I be accused of making a fraudulent claim if I do ahead?



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