I'm just a step or two ahead of you on this learning curve.
The only negatives I can see to booking separately, is that you don't get the free round of mini golf, the luggage tags, marina discount, Planet Hollywood $15 voucher, etc. as listed under Magic Your Way section when you go into booking online with Disney.
On the plus side,
- you only pay the first night's room rate as a deposit, and you can cancel up to 5 days before your first night.
- you can still use any PIN codes you find before your travel dates if the offer is a better deal.
- you still get all the benefits of being on-site (travel, extra Magic Hours, etc.)
- AAA sells WDW tickets at a small discount. Or you can call "up to one day in advance" (I was told by a Disney CM) and add tickets to your reservation (at full cost of course) and they'll have them ready at check-in.
Because of all that, and the fact that we plan to drive (no air fare involved) we chose to skip the travel insurance. The risk... is nothing for us, unless something would happen those 5 days before the trip, and then the risk is just one night's room rate. But if you need travel insurance, any insurance agent can probably fix you up.