Timbaland Sues Over Missing Watch ... Where's My $1.8 Million???

Timbaland is still crying over that $1.8 MILLION watch that went missing two years ago (wouldn't you be?) -- and now he's filed a lawsuit against his insurance company ... claiming it REFUSES to cough up the cash to cover his claim.

According to a lawsuit filed against American Home Assurance Company last month, the music mogul claims he paid over $50,000 to take out a policy with AHA back in May 2010. Timbaland says the policy covered a slew of expensive items, including his Jacob & Co. 18K white gold watch, loaded with over 30 CARATS of diamonds!!!

In the suit, Timbaland claims he lost the watch in August 2010 and filed a claim with AHA -- and even testified under oath that it was missing -- but the company DENIED his request and hasn't paid a dime.

But there's a twist ... this is the SAME watch Timbaland reported stolen two years ago -- which is when his family called the cops ... claiming he was so distraught by the loss they feared he might commit suicide. Timbaland was adamant he never planned to kill himself.

At the time, he told the L.A. County Sheriff's department he felt "someone he knows" stole the bling and they opened an investigation.

In the suit, the rapper says he believes (and testified under oath) it was his two-and-a-half-year-old daughter who "picked [the watch] up and played with it until she became bored and discarded it somewhere."

He adds, "It has never been found."

Timbaland is suing for $1.8 million -- the value of the watch -- plus interest and attorneys' fees.