You'll always find an insurer to insure something, it's just the price of that, so check cost up front. I'd want to see images of the damage too, just to check, and obviously inspect it within an inch of its life, given the big enemy is always damp. Oh and get it cheap enough such that if you do need to sell on you don't take a bath, as bugsymike says.
Eyes-open Cat Cs can be a good buy, but buyer needs to beware even more than usual!