BY CDNN

husband of honeymoon scuba diving victim Tina Watson is locked in a courtroom insurance battle that could see him receive hundreds of thousands of dollars from her death.

American Gabe Watson is fighting for a travel insurance payout boosted by compensation for "mental anguish" suffered after witnessing his wife's 2003 death at the Yongala wreck off Townsville in Queensland.

In 2000 pages of court documents obtained exclusively by The Sunday Mail, Mr Watson is officially referred to as a murder suspect for the first time.

"Mr Watson is suspected in the death of his wife while on a diving trip to Australia last year," Helena Police Department's Sgt Brad Flynn says in a December 2004 email to insurers.

Mr Watson has denied killing his wife, 26.

He told police her death was a tragic accident, that she had got into difficulty during the dive and panicked, knocking off his mask and air regulator.

By the time he recovered, his wife had been swept away in strong currents.

Last month two Queensland detectives spearheaded a surprise raid on Mr Watson's home in Hoover, Alabama, in conjunction with the FBI.

They seized his computer and other material but continued to refer to him as a witness.

Mr Watson's court action is against the travel agency that arranged the trip, Getaway of Birmingham, Alabama, and travel insurers Old Republic Insurance Co and Travelex Insurance Services.

The insurers sought to delay the case, being fought out in Alabama's Jefferson County Courthouse, while police investigations continue.

Insurers holding out

The insurers argue in the court documents that they are not required to pay policy holders who are suspected of committing a crime to gain a payout.

"Despite the plaintiff's suggestion to the contrary, it is beyond doubt that the plaintiff is a suspect in - and implicated by - the investigation into the death of the insured," the insurers say in documents filed in December.

"It is undisputed that this homicide investigation is still pending.

"It is well settled law that a 'person cannot be permitted to benefit from his own wrongdoing'."

The investigation was due to be completed in the first half of this year, the insurers said.

Mr Watson's lawyers argued in court documents that the criminal investigation had no impact on the insurance claim.

"The defendants seem to insinuate by filing this motion that the ongoing criminal investigation somehow implicates the plaintiff.

"There is absolutely no evidence that the plaintiff is in any way implicated in this ongoing criminal investigation."

Mr Watson contacted his travel insurers as soon as five days after his wife's death.

Gabe and Tina Watson photographed not long before Ms. Watson died on her honeymoon while diving off the Mike Ball Dive Expeditions 'Spoil Sport' in strong currents at the Yongala wreck site.

His insurers refused to make a payout as the policy's fine print said it did not cover loss "while participating in skydiving, hang gliding, bungee cord jumping, scuba diving or deep sea diving".

----------------------------------------------------------------------