Can I sue her for stress on our family after they prove she is a con?

You could file a counterclaim for abuse of process.

I promise that your insurance company will not pay a penny more than it has to.

If, and this is a big if, you can prove that she sued you for damages not caused by this incident, AND you either get her to dismiss her claim without a release of claims on your part, or you go through trial and win, again because of proof the damages were not caused by this incident, you could possibly sue her for wrongful institution of civil litigation. (sometimes referred to as malicious prosecution.) Courts disfavor such lawsuits but they do exist and it is a viable cause of action, but you MUST have a favorable outcome on her suit before you could proceed.

Don't waste your energy being angry at the person who was injured. Their lawyer is doing their job by naming all the potentially responsible parties. If the at fault lawyer decides to say that you hit the car in front of you before they hit your car, then the injured party would be screwed. It would be malpractice for the attorney not to name you in the lawsuit. Really more likely than not, the insurance companies (your included) are the ones trying to drag this out and are unreasonable. It is much easier to believe that the other person is lying than the insurance companies are trying to save a few buck and really do not care at all about what nice people like you think and want. You don't have much to worry about.

There is a cause of action for abuse of process, but I highly doubt that you would have a case here since she has a potential cause of action.Her lawyers just may have overstated damages, but that is the safest thing for lawyers to do in complaints and is allowed. The idea is that it's better to ask for more than not enough. A complaint is like wishing out loud for the moon the stars and the sun. Wishing out loud is one thing, but getting everything you ask for in a lawsuit is something very different. Ok, now you didn't ask, but I'm going to address your concerns about liability beyond the limits of your policy, which is stressing you out. If what you described is true, it's not likely there will be a judgment beyond the limits of the policy. Ask your defense lawyer for his or her opinion. Most defense lawyers have a good grip on the amount involved in settlements and judgments for a case like your husband's case. Listen to what he or she has to say about that. My guess is that they will tell you that you really don't have anything to worry about. However, there is a cheap easy way to legally protect yourself from liability beyond the limits of your policy. The defense lawyer who the insurance company hired should have told you that you can get your own lawyer to protect your interests in that regard. But, you'd have to hire one at your expense and that can be costly. The cheapest, easiest way, that few people know about, for you to protect yourself from liability beyond the limits of your policy, is for your husband to tell the insurance company, in writing, to settle the claim within the limits of the policy. When you do that, if the insurance company does not settle within the limits and you get hit with a judgment in excess of the limits, the insurance company has to eat it, literally.

The insurance lawyer is fully aware of all you say except your emotions. If the claim is fraudulent they will deal with it as such you can counterclaim for most anything you can prove. If the insurance lawyer doesn't want to help you do that hire your own lawyer to do it.

Because the auto accident occurred in California, you may need to consult with an attorney that handles California Claims.