I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

Hopefully your insurance policy also compensates you for loss of use - where it continues to provide you your rental income.  

The first rule of gambling is that no single loss can wipe you out.

Sometimes, they include extra unnecessary details just to throw you off.

If price goes down, I still have the paper loss whether I have paid it down or still have the mortgage.

I lent $225,000 of which $185,000 was for the purchase of the property and $40,000 is going toward renovations.As a lender I just want to get back my loan amount back (in this instance $225,000) if there is a total loss with the property.I have seen where a lender tells the insurance agent how much property insurance he/she wants based on a price per square foot calculation.On the other hand I have also seen where a lender tells the insurance agent that the amount of property insurance should be the loan amount in this instance $225,000.

In life we get caught off guard with Health issues, Death in the family, Loss of business or jobs (Unexpected pandemics!).

Demographically, very slow (sub 1%) population loss is fine, these things tend to rebound eventually.

I'm not sure what to do....The move may be unnecessary.

There could be other factors that fit as well, missed payments, illness, job loss, vacant, poorly run rental.