I've heard that claim about insurance quite a few times, but I am skeptical. Can anyone cite an actual incident where insurance backed out on what some might consider a "technicality"?
A number of years back a local pilot (who should have known better) hit one of the big towers we have in the area. The airplane was a Cherokee with an AD on the landing gear torque links which was overdue. Guess what happened to the claim even though the overdue AD would have had nothing to do with the accident?
That certainly is the exception, not the norm, but still an example.