Paris Hilton won't return borrowed jewels-lawsuit

* Insurer says heiress was negligent in protecting jewels

* Hilton spokeswoman rejects claim, says jewelry not found

By Ben Berkowitz and Jonathan Stempel

NEW YORK, April 7 (Reuters) - Paris Hilton is holding $60,000 of jewelry that does not belong to her and should give it back, a new lawsuit contends.

A German insurer, Allianz SE (ALVG.DE), has sued the celebrity socialite and heiress to the Hilton Hotels fortune, saying she has ignored several attempts to recover the borrowed jewels.

According to an April 6 complaint filed in a New York state court, Hilton borrowed the jewelry in 2007 from the Manhattan jeweler Damiani, promising to store it in a safe or vault when she was not using it.

But Allianz said the gems sat unguarded on a closet shelf in Hilton's unlocked Los Angeles mansion when they and some $2.7 million worth of other jewelry were stolen in a Dec. 19, 2008, burglary while Hilton attended a Hollywood party.

Allianz said Los Angeles police found and returned the jewelry to Hilton after it had already paid Damiani's claim under an insurance policy.

It said it began asking Hilton and two eponymously named companies she controls to return the jewelry, but that phone calls and email messages have been ignored.

Allianz's lawsuit accuses Hilton of negligence and breach of contract.

A Hilton spokeswoman said the lawsuit was "not based on fact," and that none of Hilton's representatives ever told Allianz that the stolen Damiani jewelry had been returned. "Only costume jewelry was recovered," she said.

The case is Allianz Global Corporate & Specialty AG et al vs. Hilton et al, New York State Supreme Court, New York County, No. 104169/2011. (Reporting by Ben Berkowitz and Jonathan Stempel; Editing by Maureen Bavdek)