They certainly won't pay out in many cases without thorough investigation.
I subcontracted for a classification society in Thailand some time ago. We received regular work where we were hired by the insurers or their investigators to provide evidence to support (or refute) the insurance claim i.e. inspection reports, non-destructive testing, etc.
In the vast majority of cases we did not find evidence to support the insurance claim. That was not up to us to decide however, we only provided the reports.
Often the asset under inspection was barely damaged, and had been resold to another party, with the owner trying to claim insurance for minor damage. Double dipping.
I can recall a few cases in which the company owner got violent and started threatening our inspection team to find damage that wasn't there.
Fun times.