bro, if its clear case of hit from back there is no way it effect ur insurance . so claim insurance , and i think that officer was either racist or related to that girl to advice u like that. because if there is clear case of hit and run she shold be arrested and he shouldnot say dont report insurance. there is nothing to do with your insurance. because thats complete her fault. she was supposed to get tickets for hit and run too.
claim insurance dont try to settle case outside, she will pay less of course. in worat case hire lawer too.