I have had similar worries, because of a question concerning my own paperwork, since resolved. I had the feeling that it was grossly unreasonable to deny cover for what was in my opinion at least, a trivial detail with absolutely no bearing on safety. As well as all that I was in a voluntary recurrent training program and reckoned by that alone I ought to have qualified for a reduced premium (wishiful)
So I get on the email and got a fairly stock reply. The gentleman who replied was the company principal and I called him. Our phone conversation ranged around a number of issues already discussed here. He did state however that they were known to have paid out in some instances where there was some illegality. I told him I was able to take some comfort from that, but old Groucho Marx left us in little doubt what a verbal contract is worth.
One suggestion was to do with a sliding scale of discount for breaches of paperwork Ts & Cs. I think they are looking at that.
I made it clear to him I did not want insurance with a sword hanging over my head. After all we are paying not to worry about bad stuff, and they with that legalistic attitude are in the business of undermining our confidence that an accident will have the least worst outcome. I want insurance that is very lenient on immaterial breaches of any kind, and that rewards people like myself who invest money in post PPL refresher courses, casual or otherwise. I think that's a sensible deal even from the POV of the insurer. He pays in the currency of fairness and gets our money for that reason. He rewards persons that continue to focus tangibly on safety awareness in the form perhaps of credits for training, seminars, books read, all of those good things.
Time to reword the policy, and especially away with the BS that is condition precedent. Some other poster suggested that keeping paperwork is a sign of a good approach to flying discipline. That may well be true, but I would prefer a higher priority being accorded to practical safety work by the insurer.
I think it would take a genius to invent a human attitude indicator/recorder, thereby separating negligence and bravado from genuine human error and misfortune.
thus endeth my 2c