if you want to support our work here and all the information you get from this website, please purchase your IR pass from our shop - official prices, free delivery to the UK plus all the information from experiences IR travellers. Thank you. https://en.rail.cc/shop/#/pass/interra ... al_passes/
Personally I dont think you need the extra insurance, I have travelled 10+ times with IR passes and never lost or got stolen my pass. Check what is covered with your standard travel insurance and save the money for some extra beers or so.
While travelling, put your IR pass, passport and some cash in a pouch which you can wear under your clothes, especially while travelling this is the safest thing to do.
You are right, currently (and on till 2013) there are construction works in Turkey, from the border station of Kapikule till Istanbul there is a bus replacement service which of course is covered by your ticket. However, this means getting up late at night for the last bit to Istanbul.
Unfortunately there is no alternative travel route.