What are they claiming damages for? Bear in mind that generally if you go to a solicitor and pay them money they will write you a letter but there has to be a basis to the claim. That doesn’t mean the claim has any substance.
You can’t just ‘claim damages’.
Further, If there is a reason stated for why you should be paying damages did you do the thing that they are claiming damages for.
My idiot neighbour has had various solicitors letters sent to me and my other neighbours before and I’ve just responded myself as the claims were so nonsensical I didn’t need a solicitor to respond for me.
That said I have had a few years experience dealing with complex insurance litigation.
If you are happy that the claim is nonsense then report to the police etc but you will still have to respond to the solicitor in accordance with pre-action protocol.
Do you have legal expenses cover on your home insurance? If so I’d start off by giving them a call.