Again, not blaming Roofstock because it's not necessarily their fault... it's just the nature of their marketplace and so many unknown element that can lead to things like this.

I would love to maximize cash flow but also do not want to be left on an island if there is damage. 

You are allowed to charge for ALL damages beyond ordinary wear-and-tear.

The risk of property damage or a lawsuit from a dog bite is too high. 

My #1 fear going into this was partying guests disturbing neighbors and damaging the property.

@Melissa SejourRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

My recollection is (and insurance experts on BP can correct me if my memory is wrong), but most insurers will only pay "replacement cost"  policy limits, if you actually replace the damaged property.

It occurred to me today that I've never asked about umbrella insurance claims.I’m particularly interested in real-world examples where this type of policy came through during:Property damage (fires, storms, floods, etc.)Liability claims involving tenants or third partiesMajor unforeseen eventsIf you’ve ever had to file a claim and your umbrella policy saved your bacon, I’d love to hear:What happened?

A couple of Roof claims due to storm damage in Tucson, and we had several sub-to deals in Oklahoma when grapefruit size hail decimated a big section of the whole town. 

@Rory DarcyRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?