Most instance policies will say that if a policyholder drink-drivers, the policy is void. If they paid a third party out for the repairs it then means the insurer will pursue the driver at fault (as they are not covered if they drink-drive). This is the issue. It wouldn't matter they have waited this long, indeed they have up to 6 years to issue a claim at court if you did not pay the demand. You should ask them for a breakdown of the £7,000.
Given the dispute with the insurer, you can avail of the Financial Ombudsman Service dispute resolution scheme - which is much quicker than court action and free to use. You have to go through a complaints procedure first. During this time (8 weeks for the insurer then 16 weeks for the Ombudsman) the insurer should not attempt to recover the money from you.
You are covered under the Consumer Rights Act 2015 here which means you have a right to expect a service (from the insurer) carried out with reasonable care and skill. Furthermore, the policy should be “fit for purpose” and “as described”. If it isn’t then you can allege breach of your consumer rights and breach of contract.
You should now make a formal complaint and if that does not resolve the matter ask them for a "deadlock letter", which is a letter giving their final response. Their complaints procedure will be available on their website.
Once you have the deadlock letter the next step would be to escalate this to the Ombudsman - they will investigate and liaise with the insurer which would hopefully result in a resolution. They can order the insurer to make a financial award for inconvenience if they have acted poorly.
Once you have their final response, you can make the complaint to the Ombudsman here : www.financial-ombudsman.org.uk/consumers/how-to-complain
Or by email:***@******.***
The Ombudsman will look at this case independently and will make a decision based on what happened. Their decision is binding on the insurer.
If they go on to sue, you will need to respond to the claim - the court will send you a response pack which must be competed and returned to the court - this indicates whether you admit to the claim or deny it.