This is the most basic level of protection and it is not very effective, but it is still better than nothing.

Is it cost effective for smaller units? 

Is the water leaking from a pipe, damaged roof, clogged gutters, or some other source?

Under F.S. 83.595, landlords have 4 options when a tenant terminates early, one of which includes charging the tenant an early termination fee (no more than 2 months' rent), but if your lease agreement does not provide for liquidated damages upon a tenant's early termination, you have only 3 options as a landlord.

I also wouldn't be opposed to using a 203k loan to finance and renovate a multifamily to house hack and rent out (I know it's a lot more work and harder to achieve but I think the potential could definitely make it worth while, especially with the up coming changes going into effect soon). 

We rarely have issues with animals causing damage and less than 1% of all pet owners cause more damage than the security deposit will cover.Pet owners pay more and stay longer.

The owner whose HVAC was clogged has been uncooperative and is refusing to pay us the cost of the damages.

The $1200 a month increase would take effect while he is on disabilty and he will likely be responsible most of the $1200 while on disability. 

Then it may be possible to develop a better repair budget or adjust the preventative maintenance schedule.For example, unexpected property damage could be viewed as a short-term issue, and you should quickly bounce back financially.

I had a renter cause damage.