Alkemyst-
I'm gonna help you here. It's NOT as bad as people are making it sound. First off a few questions, since I just skimmed most of the posts:
Were the police called?
Was a report filed?
Do you have any witness information for before or after the collision?
Was an ambulance called?
Have you given a recorded statement to your insurance?
Like others have said (and yourself), you are at fault. That's no big deal. What is a big deal is the apparent insurance fraud you're being set up for. The behavior you described them exhibiting is VERY suspicious.
Your insurance will accept liability and make them a settlement offer. The offer will probably be 'too low', so THEN they'll go and "lawyer up". Liability will not be an issue, just damages. You'll want to take a few steps to document the possible fraud.
First, if the police were called, get a copy of the report. If they were not, see if your jurisdiction requires or allows you to make a written statement of the accident. Be sure you do so if you can, so it becomes part of the record. Be sure to document their apparent pain immediately afterward.
Second, if you have any witnesses, turn that information over to your insurance. The most useful witnesses are the ones that may have stopped after the accident and can testify to the claimants' pain.
Be sure to give a recorded statement to your insurance.
Give any information (legally) acquired about the claimant to your insurance and be sure they run an ISO screen.
Given the claimants' history, they seemed predisposed to exaggerating an injury in the hopes that it will get them out of financial difficulty. What they probably don't realize is that the injuries they were faking, soft tissue neck and back if I remember, take several hours or DAYS to manifest, since they are muscular injuries. Only an acute injury, like a broken bone, would manifest immediately.
Ambulance records or a hospital visit will actually be useful to you, as they will probably only contain ICD-9 and CPT codes for soft tissue complaints. Those are hard to diagnose as they typically only exhibit anecdotal symptoms (i.e. I have to TELL you about them, you can't observe them). The doctors or EMTs should be able to rule out anything really serious.
At that point their attorney will say they are seriously hurt and spend soooo much time and money missing work and being treated and want policy limits. Your insurance should counter by saying 'BS, they have soft tissue injuries, if anything. Treatment should last a few weeks, max. They have a disposition for exaggerating, since the ISO reports they are in trouble financially. We'll give you $xxxx and consider yourself lucky.' A good attorney will take it and walk away, while a skeevy one will file suit.
If they sue, my only advice at that point will be to be sure your insurance team gets copies of his cell records in discovery. I'd bet he called an attorney right away, which unless he's on retainer, is good evidence of fraud.