I missed the first 20 minutes - How did she die?
I missed the first bit of the first episode (started watching when Pete is told off by the husband in front of everybody) and didn't get how Katy died.
I know it sounds morbid, but I was curious.
She was in the process of leaving her husband for Pete; she was walking across the road towards Pete and the husband began to shout across at her and she turned to look at him, from where she was hit by a car.
"Innocence Has A Power Evil Cannot Imagine"
Pan's Labryinth