Your insurance company might want to look at the property. 

what is damage protection insurance? 

Good insurance, particularly with an umbrella liability policy provides very adequate protection on smaller assets. 

I've only ever purchased homes as primaries, one being rented out currently to an insurance company and the other is my current primary.

Include an exit strategy, tax planning, and insurance to protect both parties.

My agent said it wasn't worth challenging because Nationwide is leaving the state.Our insur. agency sent a new proposal from Bass insur.

One thing you may want to consider is some sort of umbrella insurance - that might be a cheaper option, I'd price out bother.

You should also check to ensure they have Errors & Omissions insurance, Fidelity Bond coverage, and a Financial Institution Blanket Bond.Some are more consultative and advisory and provide guidance, while others are just processors. 

Only thing better would be initial deposit and then paid in full upon Certificate of Occupancy and punchlist complete.Of course, standard items should also be checked: licensed, insured, willing and able to pull all required permits, reference checks.I would also commonly avoid the cheapest bid you get.  

@Kay S.Assuming you are getting title insurance (which I recommend) the closing costs will be similar to a traditional closing.