Either I risk losing my insurance or I do what they tell me.

it is technically a real thing but very rare, and there is plenty of historical data out there that shows those who have less skin in the game are at a far greater risk of default by a factor of 5-7x.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

They are still a risk, and I would not rent to them.

Do you think First Insurance will, insure in a high fire risk locale? 

Starting small through house hacking, long-term rentals, or flipping helped me gain experience without taking on too much risk.

Their most significant risk is an injury lawsuit that will either be dismissed or settled out of court by their insurance provider for well below the liability limits.If a mom-and-pop investor obeys the law and treats their tenants honestly, they'll never have to worry about asset protection beyond ordinary insurance and a small reserve. 

Definitely not, IMO, Been there and its a waste of time and money and risk unless you have dedicated plan to take advantage of having it.

Using your first property as collateral could help reduce the cash you need upfront, but it’s essential to weigh the risks and it's not really recommended specially if this will be your first.I recommend focusing on building reserves or seeking partnerships to fund flips.

These are very risk gambles that should only be attempted with money you don't really care about.