Turned down for insurance?

[Steve Volk]

I'm scheduled to close on a REO SFR that I'm planning to remodel and rent out. I called my insurance agent to arrange for home owners insurance and a few days later he informed me that State Farm looked at pictures of the house online and they declined to insure the property.

There's some peeling paint, drywall damage and a few shingles missing but the house is far from falling down and I should have it rent ready in about a month. 

I'm not sure what my options are on this, I'd like to close next week. I'm paying cash for the property so I'm wondering if I even need insurance on it to close. I certainly don't want to buy the property and not have it insured but I also don't feel I have time to call every insurance agent in town to see if they'll insure it, only to get turned down again.

Any advice on what to do in a situation like this?

Thanks!