You could program whatever logic you want into the insurance. For example, some kind of dispute resolution system that appeals to a higher authority.
How do insurance companies deal with this problem today? Why do you trust the insurance company not to lie and say that the weather was fine? Whatever that mechanism is, it can be programmed into a smart contract.
The legal system. It can put people in jail for fraud if necessary.
Do you really want "smart" "contracts" to have the power to put people in jail? Really?
A contract dispute is where both parties are truthful, but disagree on the resolution of the contract. This is the part smart contracts fix.
And it's how insurance companies deal with these problems today.
I'm just saying that it's possible to solve the problem the same way that it is solved today.
Since this is the exact thing that the double spending algorithm would check against this wouldn't be allowed, and therefore you can't have normal insurance in a blockchain world.