Does renters insurance cover something like this?  

I have high revenue from my rentals and have diversified other investments that cover my lifestyle.  

My initial guess would be look at 1 bed 1 bath rentals in the area but is that the best way to estimate?

As I mentioned above, the risk of being sued, found guilty, and fined more than your insurance will cover is almost non-existent. 

Her retirement income would be used to cover the mortgage.I hope this gives you an idea of my plan.

Think beachfront condos that not only cover their costs but actually give you solid cash flow.

But it seems like the current house prices (3+ beds, 2+ baths with a pool) doesn't seem to incur a good cash flow.

@Paw Nouri Maybe in your area they will cover damages but not in Maryland.

Not every state or city mandates that any landlord has to accept Section 8, because the landlord has to not only subject their property to Section 8 inspections, rules and regulations, they also often have to separately arrange for the tenant to pay the non-covered part of the rent and can face difficulty evicting just based on that.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.