[happyjack]

Insurance is not a legal requirement. Some individual airports will make you have a "on the ground policy" (couple hundred dollars a year) to cover movement and other people's property.

You can get liability only insurance, or full hull coverage (I.e. you crash you get a check). Your premium is based on your flight experience and your age (some insurance companies won't underwrite if over 70, some won't underwrite if they think your experience is low for the type of aircraft). I have a $150k hull value plane, and liability for me is $540 a year, and hull coverage is $3500. I do liability only.

Mechanics typically buy whatever insurance they feel they need to be "safe." My mechanic doesn't have insurance, but he also says "hell no" to a ton of folks because working on a flight school plane isn't worth the headaches and putting your name on it, since statistics say they will most likely crash.