Definately a stressful time, but i have to agree. You have already done him a massive favour by not getting him done for taking a vechile without concent. However, you really need to look at the bigger picture. If someone had of been hurt you wouldnt have had this option, the police would have done him for taking without concent/theft if you didnt back them up then your own insurance wouldnt have paid out for any damages, and the police could give you points for letting him drive
The offences are known as IN10, driving without insurance, and IN12, allowing someone else to drive your car without insurance.
Both carry an automatic six to eight penalty points on your licence but, in the worst case, also come with a fine of up to £5,000 and a driving ban.
Insurance is going to be a killer. Without point depending on car insurance can easily hit £2-3k double that with 6 points. Only way to try bring that down would be once hes passed his test is get him enrolled on an advanced driver course and pass it as it will help with costs.