Actually, it's not "fully" insured (it being your investment)
Say you buy one for 2 BTC. If pirate defaults, you only get 1 BTC back. That's 50% insurance on 3% WPR. Still not a good idea if you think pirate will default in less than 17 weeks.
Yeah, there's no advantage to this over just depositing 1BTC with pirate and getting 7% WPR. If Pirate defaults you lose the 1 BTC either way, except you can invest the other 1 BTC in something else.