I always pre book a hotel for the first couple days and the last night or 2.

Yeah, most countries will have some sort of limit for tourists, even if it isn't official. Anything more than 6 months, and I wouldn't consider you a tourist either, and I'd be asking all sorts of questions too.

Travel insurance in general means different things. If you book flights, cars, cruises etc with many credit cards, you are insured against injury during the flight, drive, or cruise. (Unless this is only a north American thing??).

This story suggests that these people had no return flight itinerary, no proof of housing/hotel, no cash on hand, and no credit/debit card on hand?