i have seen a few times where they have , for example they have several complaints against a person and they know they are usin hacks to steal insured items , but are still in process of gathering imformation to hang guy .
yes it is rare but occasionally gms will replace items . 3 years seen it first hand twice , the last time they gave a buddy 78resist gorget with stam and mana regen lucky F@#k

insured items (are supposed to) be on your body when rezzed. blessed items though i think stay on corpse and will decay with body if you do not get back in time to loot.

Blessed items will be in your pack when you rez. Insured items will be in your pack when rezzed as long as you keep them insured. Click yourself and get the menu, and toggle the option to auto-renew insurance upon death so you don't have to keep re-insuring them each time.

Insurance is a buggy thing tho. Most of the time it works, but sometimes it doesn't. I seem to lose things when I fight a harrower, insured or not. Also make sure you have enough gold to cover the insurance costs if you auto-renew. Sometimes it might be cheaper to just get new armor, if the armor wasn't all that uber to start with.