Lastly, I had no intention of retaining an attorney to represent me. Do people do that for $500 in small claims court? I'm more than capable of presenting this case; it's pretty simple at face value.
Your limit in Iowa is $5,000.00. Anything under that is Small Claims. There is a 5 year statute of limitations on property damage.
Remember, if he sues, you may get stuck with the costs as well. That means the filing fee of $50 plus what it would cost to serve you. So, it could be another $100 or so. You may want to consider that as well. If you lose you could pay more.
I don't see how he can prove it if he didn't actually witness it. He would have to get the person who actually witnessed it to testify for him.
I do this all the time for work. It's usually $1000 or more.
Out of curiosity, who do you have for an insurance company. Don't worry, I'm not an agent trying to get a sale. There's just a few companies that have reputations.