Condo Insurance Claim against me by neighbour

[John Santos]

I own a condo that in New Jersy. Due to water leak in my condo the neighbour downstair had his ceiling damaged. His insurance company paid him a claim of $950 and sent me a subrogation letter that now I owe this amount to them. What are my options? I I have my insurance company settle this amount? Or should I pay this amount from my pocket or should I ignore this subrogation letter alltogether? What is the downside to me if I ignore such letters alltogether? Will the insurance company go after me? If yes in what way? Will they go to court or to a collection agency? I know I am not at fault as the leak happened due to a pipe that became old in my condo. It was an unfortunate accident.

The subrogation letters says the following;
We Paid = $950, Deductible = $1000, Amount = $1950. "Our investigation regarding the incident that occured indicates that you are the responsible party and we are seeking restitution for the payments we have made to repair our insured's property"
Here are they looking at recovering only $950?