EVE Online's insurance system has been a hot topic of debate over the years. Under the current system, ships have a fixed base value calculated according to the minerals used in their production. Platinum insurance costs 30% of this base value for three months worth of coverage and if the ship is destroyed in that time, 100% of the base value in ISK is deposited into your wallet. It's a safety net designed to lower the cost of losing ships and promote PvP. The main drawback of the system is that the values it uses for minerals are fixed and haven't changed since EVE came out in 2003. The prices of the various minerals that go into a ship have changed drastically over the years but insurance costs and payouts have remained constant.
Skip past the cut for a breakdown of the problems with the current insurance system and details of CCP's new plans.