The problem is the suggested denial of any responsibility by the
insurance company if ANYTHING can be found to be non STPed, PMAed, or
XYZed, even tho it had nothing to do with the insurance problem.

Yes, if you believe everything you read on the newsgroups, you might
get that idea. It's not right.

Generally the insurance will require that the airplane be airworthy,
and of course no GA airplane is ever really airworthy, in the sense
that a determined fed can always ground it. But here's the important
difference - an FAA inspector is, in effect, accountable to nobody. At
worst, he may have to prove his case before an ALJ, where he gets
certain privileges. For example, he gets to interpret the regulations
as he sees fit, and the ALJ must defer to him (there is precedent for
this). Also, he is not considered an interested party, and the
pilot/owner is, so if it's his word against yours, he is automatically
believed no matter what he says, regardless of how improbable it is.
And you can forget about bringing in a practicing A&P as an expert
witness - he will know better than to **** off the inspector who can
then go after him. So basically, if an FAA inspector says your
airplane isn't airworthy, you can't fight him.

The insurance adjuster doesn't play by the same rules. If the company
refuses to pay, the case goes to civil court. Since your airplane
presumably had an annual inspection signed off by an IA, who is in
effect a federal designee, it is presumed to be airworthy. He will
likely testify that it was airworthy. It is up to the insurance
company to prove it wasn't. In front of a judge (and jury, if you so
choose). Using normal rules of evidence. They're going to need their
own experts, an investigation where nobody will cooperate with them,
etc. Expensive.

Also, not everything that is written into a contract can be enforced.
It has to be reasonable. If the airworthiness discrepancy is unrelated
to the accident, the judge is not going to look kindly on the insurance
company trying to weasel out of payment on that basis. And a jury is
really unlikely to take the insurance company's side against an
individual in any case.

So basically the concers are overblown.

There are a few rare cases where claims were denied due to
airworthiness issues, but these were egregious situations - flight out
of annual, major AD's not complied with that contributed to the
accident, and in the case of experimentals major alteration made
without the required FAA approval and recertification (no longer
required). I really would not worry about a Radio Shack PTT switch in
your Archer causing you to lose insurance coverage.

Michael