I would of thought it obvious that if you selected NOT to accept the insurance then you would lose everything you put into that ship.
Also make sure have have a look over the manual and if you think it does not explain something well enough let FD know and see if they can amend it.
Quote from the manual on insurance:
Your first ship is essentially on loan, and covered by a comprehensive insurance policy, ensuring
that you only have to pay a bounty or fine to be issued with a replacement.
Any modules you purchase and fit to this ship are covered by a lesser insurance – should they
need to be replaced you will have to pay a premium excess.
Should you purchase a ship, then this too is covered by a lesser insurance policy – should it be
destroyed, you will need to pay a premium excess for it and all modules fitted.
Although the premium excess fees are only small fractions of the ship and modules’ actual
worth, the resulting bill can still become significant, potentially more than you can afford.
In such circumstances you have a number of options. Assuming you have enough to cover
the hull cost (which includes all mandatory modules), you can choose not to pay for optional
modules, reducing the cost.
You have access to a creditor who can lend you up to 200,000CR. If you take this option, any
credits you make will have 10% deducted at source until the debt is paid.
If you have ships in storage, you can choose to abandon your current vessel claim and select
a ship in storage to activate.
If you have no ships and not enough credits to even pay the bounty or fine you owe at the
starport or outpost you arrive at after your ship has been destroyed, you are declared bankrupt.
All debt and crimes are cleared and you are transported to your starting location where you
receive a new loaned starting ship.
Effectively, your career is reset, but note that you retain all reputation and rank gained/lost (to
clear your career completely you will need to clear your save from the main menu).
