Concerns have been raised that the cost of insurance could be pushed up following a Supreme Court decision.
Experts said the ruling means that "collateral lies", which do not affect an overall claim, will no longer mean a claim is simply rejected by an insurer.
The Association of British Insurers (ABI) said the decision on Wednesday risks pushing up the cost of insurance and prolonging payouts for the vast majority of people who are honest customers.
But Kevin Pratt, a consumer affairs expert at MoneySuperMarket, said the decision means insurers will not be able to throw out valid claims on "little more than a technicality".
James Dalton, director of general insurance policy at the ABI, said: "Allowing 'collateral lies' in the course of an insurance claim flies in the face of the work that the insurance industry and Government have been doing to crack down on the cheats and fraudsters.
"This decision risks pushing up the cost of insurance and prolonging the pay-out process for the vast majority of people who are honest customers."
However, Mr Pratt said: "It does mean that insurers will not be able to throw out perfectly valid claims on little more than a technicality.
"It will still be a fraud if you fabricate a claim, and it will still be a fraud if you exaggerate a claim. But insurers can no longer use so-called 'collateral lies' to reject a valid claim."