It very much depends on the insurance company. I work with a variety of them on a daily basis and each have different protocols.
Yes, it may invalidate any claim if you have told lies and if so, you may find another insurance company won't touch you with a bargepole. On the other hand, if you had a claim, you could find that the insurnace company would just reduce the amount they would be willing to pay out. For example, if your vehicle did not have a valid MOT they may reduce their payout by say 10 or 20%. Suffice to say that any future premiums would skyrocket, cause you are a liar.
The police would not be involved, its a civil issue, unless it is part of a large fraudulent scheme.
Insurance companies work in mysterious ways - contrary to common belief, they will payout on almost anything.