Make sure there are no liens against the aircraft, its been my experience that the seller will try and sneak it by, and will look really surprised when you tell him he hasn't paid that mechanic for the annual he did last year.
I don't know of any insurance company that will let you pay by the hour, if you find one.....tell everyone! What you pay is all depending on what kind of operation you do I believe. Dealing with insurance is the worst part of aviation in my opinion.