I don't see why you wouldn't be able to get SquareTrade for it. If you're buying from eBay, you're protected with buyer protection. I think Swappa has something similar. I guess it partially depends where it's coming from.
Going to see it tomorrow.
1. Should I ask them to wipe phone to make sure there are no issues?
2. Should I have Verizon activate it first before paying?
Yes, they need to sign out of their Google account and do a factory reset and verify you can log into your account without any issues. Activating won't be a problem, you can do that simply by inserting an active Verizon Wireless SIM (may require reboot).
Meeting at a Verizon store to make sure there are no problem with activation is probably one of the smartest things you can do. Provides some peace of mind on both sides. I usually figure if someone is willing to meet me at a Verizon store and go inside to allow the phone activation, they're probably pretty honest. Also deters people from trying to rob you if you're inside. I don't hand any money over until phone activates properly and I can make a call out. Hope it all works out well for you. Sounds like a good deal.
^ this. Whether buying or selling, I always offer to meet at a Verizon store. They can make sure the phone is clean, activatable, and usually weeds out anyone who is not on the up-and-up