Suing for car repairs?

My daughter was in a minor fender bender in December in a parking lot. My daughter backed out of her space and was pulling forward when the driver of a second car reversed out of her space, and struck the rear quarter panel of my daughter's car.

She willingly gave my daughter her insurance information, admitted to my daughter and her two friends who were in the car with her that she didn't see her when she backed out. The other driver apologized for the damages, and told my daughter she would contact her insurance company as soon as she got home. The other driver never asked for my daughter's insurance information - only her name and phone number to give to her insurance company.

Well surprise, surprise - the other driver's insurance company is now denying the claim saying the other driver did not admit fault.

So my question is (and I am pretty sure that I know the answer to this already but I want to advise my daughter correctly): Can my daughter sue the other driver in small claims (damages under $500 - less than her deductible)?

Also, my daughter had two other people in her car who witnessed the accident and are willing to go into court with her, but of course there is some bias to these witnesses as they were in her car.

We tried to be nice about this - and I even told the other driver that because I understand that this was an accident we were more than willing to take the straight cost of repairs only, and would not ask for rental coverage. She basically told me to go to hell.