Okay, we have officially left the realm of "What is absolutely the only correct way to do things" and entered the land of "What Lisa believes, due to what she was taught by her CPA dad, college personal finance professor, and a bunch of other really smart people." Meaning, this is my own personal opinion. What you decide to insure or not insure is your personal decision since you're the one who will have to live with the consequences so don't sue me. Seriously, don't. :)
So here is my take on what you should and should not insure. It can be summed up in one brief sentence: INSURE ONLY WHAT YOU CANNOT AFFORD TO LOSE.
What do I mean by that?