Touch wood, I had no problems with mine in the 2 years i owned it, and I was the first UK owner but a common thing to look out for on these is the manifolds cracking,usually on the '3rd runner' as they say. Also they tend to 'overboost' a fair bit as these have a high and low boost setting as standard and the only way really to get around this is to install an EBC and actuator and then set the boost using the EBC. Apart from that they are pretty bullet proof.
As for the price, it does seem very cheap, but maybe he just wants a quick sale for the genuine reason that he says in his for sale advert. Go and take it for a spin and see what you think,i wouldnt expect to be blown away though as it looks pretty much stock apart from the exterior mods he's listed.
IIRC i was insured with Adrian flux and i wasnt paying big bucks either, but yes you are right, not many companies do recognise them hense why most will insure them as a 1.3 starlet.
There is a couple of forums for these with loads of FAQ's etc:
Toyotagtturbo.com
UKstarletclub.com
HTH