Could a fly really look as big as a hand?

The eye color could fit a real insect. Some flies have shiny or iridescent eyes, and large horseflies or robber flies can look pretty dramatic up close. But a fly actually the size of a hand would be far outside the usual size of those insects, so I wouldn't pin it on a species from that description alone.

With no photo, location, or estimate of the insect's actual length, a large fly, another kind of insect, or a size impression that grew over time are all possibilities.

Several people seeing the same thing makes it less likely to be a lone visual glitch, but it doesn't give us a reliable measurement. A fast, surprising encounter is hard to size, especially when you're young and comparing it with your hand.

My first questions would be where this happened and whether “hand-sized” meant the body or the full span of its wings. Those details could narrow things down, though they still might not identify it.

Could also have been a different insect that read as a giant fly at a glance. A beetle, cicada, or large moth can have a bulky silhouette, and a dark body with colorful reflections can make the whole sighting feel especially vivid. Without a picture, there isn't enough to choose confidently between those options.