Of course she should pay to the extent she was at fault. I would suppose she's at quite a bit of fault for going the wrong way. That really increases the impact! The driver could easily be partially at fault for travelling into the bike lane also. Insurance/attorneys/court will have to sort out the numbers. If her damages are much, much greater with the personal injurty ... who knows who will go home with a check?
How's it work? Hypothetically, let's say she at fault 70-30. But, her damages are 10,000 with medical stuff and all. The driver's damages are only 2400 for a bumper and a scrape to the car. Does the driver owe her 3000 and she owe the driver 1680?
Maybe that's why the driver is pressing it.