House insurance, 3rd party claim

[Hohofortherobbers]

My water supply pipe leaked in December, the first I knew of it was when my neighbour said she had a wet wall.
I contacted my insurance company who sent contractors out and fixed the pipe, I paid the excess.
My neighbour gave me a quote for redecorating the damaged wall, approx £500, which I forwarded to my insurance company.
They have come back saying I am not legally obliged to pay for her damage as I was not negligent and acted immediately upon being made aware of the problem. They suggest she claims on her own insurance.
I am mortified! I cannot ask her to do that, if the tables were turned I'd be really peeved. Is this reasonable? It looks like I'm going to have to pay myself, I can't ask her to, it's so unfair, what is the point in insurance??

Your insurance company is right. You fixed the leak as soon as you were aware of it so you have no legal liability for the damage to her property. As you are not legally liable your insurers won't pay. She should be claiming from her insurers, not from you.

The point of insurance is to cover you when you are liable for damage to someone else's property (amongst other things), not to pay out when you are not liable.