Absolutely not true regarding the voiding of coverage. The only way they can void the coverage is by showing that they would have not written you had they known the truth. They can go back and charge you the difference between the correct and incorrect premium.
This is a logic fail and fact fail. The logic fail is easy: if the only penalty attached to lying on apps were an adjustment in the premium, nearly everyone would magically qualify for the lowest rates and adjust their premium only after they made a claim. Moreover, the substantial costs of insurance companies' attorneys and investigators would be exceedingly hard to justify.
The fact fail takes slightly longer to confirm: a few seconds of online searching:
http://www.insuranceforums.info/lyin...ce-t16693.html
http://www.irmi.com/expert/articles/...practices.aspx
http://www.ehow.com/how_5811440_obta...cancelled.html
http://thismatter.com/money/insuranc...good-faith.htm
http://www.peaceinastorm.com/article...-accident.html
http://www.michiganautolaw.com/auto-...titan-v-hyten/
http://ezinearticles.com/?Dont-Lie-o...rms&id=1977184
As these and countless other reports indicate, lying can
seem fine--you can go for years without getting caught. But when you
do get caught, it will be because of a ruinous claim (e.g. personal injury, as stated upthread) and you will have voided your policy. That will ruin your life, if it's not already ruined by then.