Sounds like they want you to settle for 500 dollars under the auspices of “let me pay your deductible”. I would not talk to them without consulting someone whose job isn’t to limit how much you get paid in damages.

Hot damn! Ready when you are

Now do it with someone else’s hands

Exactly. Usually “friends” bring up the idea “venting” hoping that you would offer to help. How they respond to you backing out will tell you everything. I’d have a good story that they can’t argue with that’s short like “we were going over the finances and things are a lot tighter than we thought. I thought we could stretch to help you but we cannot. I’m sorry”. If they in any way try to convince you otherwise that’s a huge red flag to me.

As others have said this is a great way to turn good friends into strangers who ignore you really fast. It sounds like you’re going to go through with it but if you can back out I would. If they have access to 60k but not the remaining 15k the question for me would be “why would the bank give them nearly enough but not the full amount?”

I hope this works out for you. Best of luck!