Getting insurance on illegal mother in law unit in Florida

[Suzie Remilien]

This question is courtesy of an investor friend. 

He just found out that his insurance company will not insure the 3/2 house he bought in Fort Lauderdale, Florida, because the mother in law unit is illegal. 

The previous owner did not have permission from the county to build the addition. He didn't know this until now. His insurance company will only insure if he guts the unit or rebuild it with the proper permits. He does not like either option.

I've suggested that he shop around to see if another insurer will cover the house under more acceptable terms. What other advice do you have for him?