Not talking about the "Insurance fraud" of dropping your stuff to the ground and grabbing other people gear so you guarantee you're not loosing your items, as they will come back.
What I believe needs some tweak is regarding if you're a solo player or if you play in groups.
If playing solo, it is pretty pointless to insure your gear unless it is really worthless and people won't bother picking it up, but if you run armor lvl 4+ or decent weapons, it will never come back.
But in the other hand, if you play in group, there are way sooooo many possibilities your teammates can pick up your items and hide them, which makes the insurance mechanic much more valuable.
As a random idea I think it could be nice if insuring would work just for one raid rather than until you lose the item, and the price would be different depending on the size of the team.
Just to clarify, I don't mean it should be a punish to insure if you're in a group, otherway around, it should be more friendly if you are solo player