3 day to perform or let it ride?

[Erin O'Connor Smith]

Reasoning this out with fellow landlords please! 

My renters are refusing to comply with our signed lease agreement's stipulation to produce proof of renter's insurance of $300k liability per person, which is standard in all my rentals. I gave them within 30 days of move-in to do so, it's been 60 with multiple reminders, and they argue now that that amount is unreasonable. They have also violated other lease items in those two months, like piling up trash in their driveway and parking too many cars, etc etc.

They have paid rent on time so far.

They have indicated they will involve lawyers if I escalate this, and remind me that since they pay rent on time I "have a good thing going" with them as tenants. 

Next steps will be either to serve a 3 day notice to perform or quit, and move through the necessary steps.

My other option is to ride out the discomfort and try the 30 days notice to quit before their one-year lease expires in June. This is a house in LA built in 1990, so not a rent-controlled...I'm verifying that.

At this point, it's not as much about the insurance itself but making sure I have tenants who comply. If I let them win this little battle, I fear I will be losing many more of bigger sizes in the future. My gut says to cut my losses and start over, I can handle the financials and there were many other interested applicants... but I wonder if with COVID an eviction case will ever be heard. At least I could get it started though, right? I welcome all feedback to get me out of my head and into some kind of decision. Thanks.

p.s.... Leases I've written since have required proof of insurance BEFORE key turnover!