We are having very similar issues here. Dd has firmed Cambridge (A*AA) and has York (AAA) as her insurance place. She is having to choose her York accommodation which has brought everything to a head as she says she does not want to go there even if she misses her Cambridge offer.
Her other offers were A A A (Exeter); A* AA (Durham) and AAA (Warwick). As York and Warwick were the only offers lower than her Cambridge offer she felt that she had to choose between them for her insurance offer and she preferred York. We briefly discussed putting Durham down with the same grades as her firm in the hope that one would relent and let her in if she missed the grades but dd felt that was too risky. She has had a lot of mental health issues this year (and missed a lot of school) and thought she would be under less pressure if she had an AAA option. I read last night that according to UCAS research in 2010, 42% of applicants have an insurance choice which is for either the same or higher grades than their firm!
The question is what to do now? She is not going to make a decision yet as we want to wait until her exams are done and she is thinking clearly but I really don't think she will want to go to York. I am wondering about taking York off her form so that if she misses her Cambridge offer, she would be free to try for Durham. However, I am aware that Durham may well not have any English places available. Her other option will be to take a gap year.
Despite the fact that she has had two very tricky papers, I do still hope that she can make her firm. Her predictions are 3 A*s (although I have always felt that is a bit optimistic!) It seems a bit scary to go into the whole thing with no insurance place though.