...for an insurance company to raise rates if the policyholder is not at fault. Regardless of how different the world may, or may not, be the law is the law. File a complaint with the Insurance Commissioner.
Besides, the other insurance company has already "determined" that their insured was not at fault. So they are not going to pay.
At this point his options are limited:
1. Try to convince the other insurance company that their own insured was at fault--good luck;
2. Hire a lawyer to convince the other insurance company that they should pay up--this can get expensive, but as long as money is going into a lawyer's pockets that's OK I guess;
3. Sue in Small Claims Court (hoping that Judge Judy will snap up the case)--this can also be tricky. If you get a Judge Pro Tem who makes a bad decision and rules against you, you are out of luck because plaintiffs don't have appeal rights in Small Claims. On the other hand, if you win, the other party can appeal, defendants do have the right to appeal. This is all very time consuming.
4. Pay for the damage yourself and avoid the hassles listed above.