Adding the cost of the ship to the pirates insurance punishes a broad group of players by lumping them all together to solve a problem created by a subset of those players.
You shouldn't punish a pirate for being a pirate. The game is called Elite: Dangerous... dangerous as in it has pirates in it. Punitive measures should be focused against players for being , and playing in ways that are not in the interests of the greater game as a whole, not for playing the game as a pirate.
Pirates are supposed to be the bad guys. They are supposed to steal your lunch money. Every good narrative has needs an antagonist to play the part of a villain.
I see a lot of effort put into suggestions aimed at discouraging or preventing a certain type of behavior by a direct penalty or rule. Very little thought is put into encouraging the natural counter behavior to balance it out. If pirate behavior appears common among players, perhaps it is because there isn't enough incentive for police and bounty hunting behavior from players. Instead of leveling a direct penalty against a pirate for being a pirate, reward the opposite, by paying players for stopping pirates trying to prey on their fellow players. It's like having a flower garden infested with aphids . You could use a harsh pesticides which would deal with the aphids, but have consequences for every thing else in the garden, including the gardener... or you could introduce lady bugs into the garden, the natural predator of aphids.
That is what the bounty system is supposed to do. The more a player pirates, the higher the bounty on them becomes until it reaches a tipping point where stopping that player becomes worth the time of a bounty hunter. Ideally, you are not directly penalizing a the pirate to stop themselves, but motivating players to stop the pirate.
The question is, is the way the Bounty System implemented effectively motivating players to balance out the natural order of roles in the game? Should more incentives be created? Higher rewards, different rewards, additional benefits?
Are the rewards sufficient, but the tools and means to capitalize on them lacking in the game? Can a player be an effective bounty hunter? I get the feeling that no, one can not. It is difficult to make a determined effort as a bounty hunter that isn't haphazard in nature, doesn't pay off well enough to justify the effort and doesn't effect the natural order of the game in the right way, at the right time and in the right places where it is needed most.
For example, I check the Bounty Board in Open Mode, I see the top CMDR listed as having a bounty of $85,000... is it worth my time to scour the game world for hours looking for a player that might not be even online, might not even be playing Open-Mode or may never be instanced with me while playing? Or I could spend 15 minutes in a conflict zone and earn 3 times that amount cashing in combat bonds I'm certain to make.
Players in any game will ultimately behave in a manor consistent with producing a predictable amount of fun in return for the effort put into playing the game.
The challenge of designing an open world game that is different than other crafted game experiences is in balancing out what motivates players to play in an open world in the first place. Which means acknowledging that players all play a game with different motivations and the point of an open world game is to create a menagerie that sustains itself out of all the different types of players . The design objective isn't in telling the players what motivations they can have, but letting them explore what ever motivates them to play they have in a way that doesn't outright oppose or collapse the experience as a whole.
Interesting to me is that often a discussion of why players won't play in an open world revolves another degenerate behavior that is likely to be encountered in the game. Degenerate behavior among players is often a result of players attempting to motivate themselves to have fun when they can't otherwise find a more legitimate style of play.
I think it also appears not because of genuinely bad behavior demonstrated by players, but as a result of a game world that can not cope in its design with naturally conflicting motivations to play in a way that is acceptable enough that players will coexist and compromise with each other.
And of course, some players just want to watch the world burn.
