So I've seen a few posts on this over the last few months and it comes up a lot on the RSI forums, so I figured I'd post a quick explanation on how servers will work in SC. I've figured this out from a few different interviews and dev posts.
The instance servers will most likely be regional. There will only be one galaxy server.
To elaborate,
The Persistence Universe(PU) will hold all the players. There are not multiple servers for the game, everyone logs into the same world. This will be run by the Galaxy server.
The Galaxy server will control information such as where people are located in the universe, what their PvP slider is set to, health, ship status etc. Mostly static things (except the location, which will be updated periodically). The Galaxy server will also be spawn instances for players to be placed in.
Instance server will control specific instances within the game. If you and ten other players can see each other, that is being controlled by the instance server. Things such as dog fighting, collision detection, and other real time events will be handled by the here.
Ex.
Lets say your on Terra and decide to leave. You will be on the Galaxy server. When launching, the Galaxy server will determine if there is an instance above Terra suitable to place you in. If there is, it will place you in it and transfer most of the server control of your character to the instance server. If there isn't, it will create a new instance and place you in it. You fool around for a while above Terra, then decide to move on, setting the autopilot for Rhetor. The instance server hands you back to the Galaxy server, who begins moving you towards Rhetor, looking for instances to drop you into along the way. After the journey (where you encountered pirates, another instance the Galaxy server put you in) the Galaxy server looks at the Rhetor instances, determines which one is best for you, or if there isn't a best one, creates a new instance, and places you in it. You then log off and the Galaxy server records your information and disconnects until the next time you log in.
I hope that makes sense, I haven't had my coffee yet . I'm not sure how loaning ships will affect insurance, but I presume it will be similar to how it works in real life. As long as you have insurance on the ship it's covered