I want to learn from experienced landlords here, how much deductible should we choose? 

You do not need to take on new debt for the $450,000 reinvestment unless you choose to do so for other financial reasons.If you have further questions or need clarification, feel free to ask!

Quote from @Jonathan Greene: Why did you choose Roofstock for a one-off investment property in the first place? 

You got the experience, now you can choose something.

It's important to understand that every investor comes from a different financial situation and as a different risk tolerance.

I would advise finding an investor friendly realtor when you choose a market.

They/you can't choose the carrier - their software assigns it.Fortegra is one of the carriers (paper in insurance parlance) that their product is written on.That said, Fortegra is A- rated I believe by AM Best so that isn't the issue.I'm going to take a guess and say that your umbrella is written with PersonalUmbrella.com (Markel) and they require all underlying insurance to be A-rated but also with an admitted carrier. 

If you choose to go with this strategy you could complete your exchange and immediately do a cash out refi.

The calculation involves:Selling Price: $1,075,000Original Purchase Price: $355,000Depreciation Recapture: $105,300 (taxed at 25%)Capital Gains: Sale price minus original cost, minus depreciation, minus selling costs (~15-20% federal capital gains rate for their income bracket).State Taxes: Since the property is in California, state capital gains taxes will also apply.Given the multiple layers, I’d highly recommend your parents work with both a CPA experienced in real estate and a qualified intermediary for the 1031 if they choose that route.If you need recommendations for professionals in Illinois or California, feel free to ask!

So choose wisely and good luck I like the passive nature myself of boat and RV storage.