1) the notary writes the Poder for you but you can write it yourself to speed up the process and just get in notarised. Make sure you get it apostilled at the ministry of foreign affairs in the country you get the Poder made. It's easy, free, and takes five minutes. The notary will tell you where the ministry is. You go in with the Poder, take a ticket for Apostille and wait your turn, they'll then stamp it for you.
2) yes you can cross borders and ride in all the countries of south America with the Poder. You can even ride up to North America and Canada with it as long as you specify in the Poder which countries you want to ride it in. Many if not half or more of the travellers on sold foreign bikes are on poders. It's not unusual or frowned upon at all.
3) as long as your Poder is a "poder ilimitado" you can transfer the power of attorney to the next person. I met a guy on a KLR in perú who was riding on the 4th Poder on his bike.
4) the bike is insured, not you. So yes, you can get insurance in all countries. If they require an address I gave them the current hostels address.
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