@Heather Bailey while I live in my duplex, I have a standard Hazard insurance policy and I also carry an additional 500k umbrella policy (optional); both policies cover the entire building, but there's no separating it. 

We have another park with a free space rent manager and as we have raised the rents he continues to live there for free. 

If you qualify for both (you've lived in the property long enough and it is used for investment when you sell it) then you get to take both.

I was forced to buy my first house because my roommate moved out and I couldn't afford to live alone.

I am still living in the past, where your word is your reputation and your reputation is your character. 

I called and emailed Nomad daily and could not reach a live person, even in an emergency.

I live in NC they’re in Texas.

Not sure if this will go against the culture here but if I read correctly and you are considering tying up your primary residence to an investment property please reconsider leveraging the home your family lives in. 

I won't be able to make the cottage legal rental without living in the primary home myself.

After 4-5-6 years then maybe roll them up into a small mulitfamily.Another option if you have the credit and some capital is to buy a 4 unit as owner/occupied and live in one and rent the other 3.