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From this I can deduce that you have never worked in insurance!

Wouldn't disagree with that. What seems to be looming over the horizon is a bit of whiplash!!!

And how far do you think you will get with that. If you don't have a witness to the original conversation you are stuffed. She might have been a bit gobby but she has every right to make a claim. As others have said though, report it to the insurers. Also, a reminder that if you are in a...