I have a State Farm personal articles policy that covers most of my camera gear at full replacement cost. At first I covered everything, memory cards, batteries, etc. but then realized that I would never make a claim for the small things if I happened to lose them. When my agent told me that her brother had a similar policy and that State Farm cancelled his policy when he made too many loss claims, I decided to only insure items costing over $300.
I've had the policy for about 5 years now and have only made one claim for a broken 580EX that I dropped. They basically paid for a new 580EXII. When I made the claim, they asked if I had gotten an estimate to repair it, which I did. Canon's estimate was a minimum of $150, so State Farm just sent me a check for what I originally paid for the 580EX. I later got the flash repaired for $150 and have kept it since I could always use another flash with 5 camera bodies.
As my collection of camera gear has grown, my annual insurance cost has doubled from around $150 to $300 per year. Is it worth it? I think so. Although I've only had one loss, I gain peace of mind and feel that I don't have to baby my equipment (although I am careful with it). I also know that if I'm ever in a situation where I'm in a confrontation with someone for my camera gear, I'd just hand it over knowing that I'd get brand new updated versions of my equipment without a problem. I would however, kindly ask for the memory cards. How ironic, in that that's one of the things I don't insure.