So I would supplement my income by flipping cars.

Jeff,You should review the Insurance coverage for the property to make sure the Named Insured matches the entity on the title. 

Short amort on this one still has a debt service coverage ratio of 1.25 at $1100 per month and jumps to 1.82 at $1600 per month. 

Total 3200 sqft home Ask the city if they mean footprint/lot coverage (yes 3200 sf) OR floor area ratio (1600 sf only).

The longer the gap in insurance coverage, the higher the future insurance premium.

My real estate investments are a supplement.

Do you really like them that much that you are willing to supplement their rent?

You may have something written in the loan documents about the minimum ratio (ie. debt service coverage ratio, times interest earned, etc) that you need to meet in order to comply with their terms, so make sure you have the line items in your financial reports needed to calculate them.

I have an insurance policy for my flip also, maybe I would add coverage for them and hire them through my LLC? 

Since this is the only property out of the whole portfolio that was flagged, we decided to bite the bullet and stick with the coverage.