Insurance 5 (Source)
From SWGANH Wiki
Ignore the **edit** above. To answer your question, only the item you insure is covered, not the contents. If you are going to go do something high risk and you need to insure, only bring what you need. You can put everything else in a safety deposit box at your bank. Now I'm not exactly sure if you have to actually join a bank to do that, so that could make things a little more complicated.
