Insurance company claiming back payment - what shall I do?

headintheclouds

My house was flooded in July 2007 and I had to claim on both lots of insurance. Contents insurance was fine and no disputes. The buildings insurance (different company) has been terrible. The claim was passed round at least 5 of the loss adjuster's offices and lost at one point. Now they are claiming they paid me money to which I was not entitled. This was claimed by e-mail - no official letter and no background reasoning or financial breakdown - last summer. The insurer wouldn't deal with me direct, so I had to go through the loss adjuster and wrote formally ask for a statement and the reasoning. This was last June. I heard nothing more until today, when I have received a demand for the money from the loss adjuster, threatening me with solicitors if I don't pay up.
There has not been at any time a claim that I did not disclose all the facts. I did and have it in writing. They have simply decided that they misapplied the criterial and now want the money back. It is entirely their mistake. Can they do this?
I've agreed that I will put the facts in writing (again) as the current loss adjuster didn't even seem to know there was a dispute. He has agreed to communicate to the insurers that they should take no further action until we have established the facts.
I would be really grateful if someone could give me an idea of what the options are.

Thanks in anticipation!

cogito

You haven't really given enough information. If they mistakenly paid you money, they are within their rights in asking you to return it but you need to tell us what you claimed for and what you received.

You say that the insurer won't deal with you direct but they won't have any option if you make a formal complaint.