I'm another with the cheap instrument solution.

As regards insurance, if an instrument is out of the house, AFAIK all insurance companies require it to be in a locked place and out of sight if it's going to be covered. The back seats of cars are explicitly NOT covered on most policies - besides also being very bad for getting hot - so if you're camping with a tent then your best bet is to keep in it the boot of the car.

If you've got a hotel room/cabin/whatever, leave it there and make sure the door's locked. It should be OK - if it gets stolen, it'll be by someone who's particularly targetting tourists, so everything else will be gone too. If you don't mind leaving your clothes and other stuff in the hotel room, then there's no reason not to leave instruments in there as well.

Most travel guitars are crap. The few that do sound good are expensive enough that you're better off getting a cheaper full-size instrument instead, unless you have serious size limits on what you can take. For the price of a Baby Taylor for example, you can get a half-dozen crappy guitars, and at least two fairly decent ones.

Graham.