I have no specialist knowledge in aircraft insurance, but I have been flying since 1984. In that time I have never had an incident which involved insurance, but I have been aware of many incidents involving other people. Even in cases involving £40k of cost to the insurance, with obvious get out options, the insurance has always paid up. I would not bet on this happening if / when I bend my aircraft, but it is hard to reconcile my experience with the comments on this thread. Perhaps if the amount was several million the insurance would be more likely to walk away, but it is the hull value that is most likely to be the issue.
If you assembled a team of legal experts and set them the task of finding a mistake in the maintenance records of your average spam can then I would expect them to win every time. Do the same on a permit machine and it would be harder to prove, but the result would probably be the same. I guess the question is, how much pain will an insurance company take before going to the trouble of finding an excuse not to pay? Any aviation insurance co that made a habit of walking away would very quickly loose its customer base.
Rod1