Unfortunately, you cannot sue the agency: they have discretion in when and whether to investigate accidents, and so are not liable for a failure to do so; that is, they had the right to decide to not investigate (You also cannot sue because 1) there is no guaranty and no way to prove that their investigation would have been helpful to you; and 2) you do have other options for evidence--see below--so this is not critical and you cannot show that the failure to get a police report has damaged you in some way.)The insurer is wrong: you can use teachers, students, your son himself, etc. as witnesses: there is no law saying that people who know a defendant cannot testify, and in most cases, at least some witnesses are friends, family, coworkers, teachers or instructors or managers, etc. of the defendant. (After all, it's typically people who know us who are near us, to witness what occured.) The other side can try to "impeach" or attack their credibility by saying they are biased, but if they are otherwise credible, there is no reason to think they cannot be effective witnesses.