The K&N kit is pointless, just makes noise. Keep the standard airbox and just get a K&N panel filter if your really desperate for a K&N. The standard airbox works better than a K&N as it doesnt suck in hot air from the top of the engine bay.
I suggest you save a little bit more and buy a GSR induction kit instead. They actually work and are very effective. Plus as dave said, insurance will charge you the same as using the K&N, which doesnt do anything anyway.
As for insurance, it varies. Depends on the company. Some might add £5 as it not really increasing power much and some might add £50 or maybe more... some might refuse to insure it. Just ring your company and ask