That will cost us about $4.8K out of pocket (our insurance deductible under our Rental Dwelling policy). 

If I had a good tenant and they continue to be a good tenant, I don't care where they legally get their money from.I agree that most S8 do not meet my criteria even without considering the source of the income.However, we have another policy that also works against S8.  

I appreciate all of the detail but what information was provided to the agent that wrote the policy?  

Then the tenant should be required to add you as "Additional Insured" which protects you under their policy.

Some people will say, "Take out a quality Insurance Policy and you will be protected."

So, here’s my question.. do you think you’d be more comfortable taking the DIY approach with strict guidelines, or might a property manager give you the peace of mind you need?

If she wants paid for canceled appointments, then I would suggest you look for a new cleaner.My policy is to keep all funds if the guests cancels within two weeks of their stay, unless I'm able to rent to someone else for the same period/rate.

One key takeaway from this deal was the importance of sticking to a strict renovation budget to maximize returns.

I do not think they regulate this strictly on other industries like food service, or even medical.Sounds like the mayor or city planner or someone "important" had a bad stay at a STR somewhere.

It is also possible that either the folks in charge of the station, or the prosecutor have set a policy of not wanting to pursue non violent crimes, or even not paying attention to crimes against folks who are not local residents.