Amen to the free ride I think she is one of those harrasment people who use the system to sue
And you very well may be next.... I would walk away from the job no matter what he offers to pay, the risk is far too high for any payment you may receive. An easy out would be to say that you spoke to your insurance agent and that you have no liability coverage in the event of an accident.
When going into business the greatest mistake people make is undervaluing their services. I have done consulting work and the only way you can calculate a rate is to know all the variables that go into the equation. You have to add all the factors, your time, your equipment, all insurance coverage (health, auto, liability, workers comp, etc.), fuel, taxes, repairs, depreciation, ancillary equipment, etc.