I can't figure out how to completely delete a post after accidentally posting twice. 

You can label the 3-pin as ungrounded or "downgrade" to 2-pin to protect yourself from the liability risk of a tenant accidentally getting shocked due to there being no ground. 

But I am wondering if my insurance would cover if they accidentally damage or burn part of the house (due to the extra wiring and lights in the garage)?

You can do this, if your mind is in this.Forget what is behind you, press on towards the mark!

I've never thought twice about sending this back to them before on my personal residences or rentals (side note: I accidentally reported buying my last house for waaay more, thinking they were asking for sale price/details on of my rental I purchased :P, so Zillow showed a HUGE discrepancy in the sale price, boosting the always spot on Zestimate...), but I was wondering is there any REQUIREMENT or real perceived benefit to submitting this to them outside of my accidental Zestimate manipulation (which I wouldn't do again, or intentionally)? 

By chance, did their bookkeeper accidentally add an extra zero to $2,000?

I would be hard-pressed to move forward on the deal without a structural engineer's report and credit.

I noticed your follow-up question accidentally.

When I pressed them on what is the downside to ask the bank's blessing for the LLC transfer, they gave evasive answers and repeated that "they wouldn't look back on a closed clean title".Closing as an LLC in the first place would require higher rates and down payment, and of course I want to pay residential rates and lower down payment.

Assuming you are not looking to flip mobile homes, you will be hard pressed to find a flip property to buy in that range.