Proof that it is damage vs wear and tear.  

In the event of an insured loss, minor issues will generally be disbursed to the borrower, major losses can end up going to the first mortgage lender leaving the borrower with a property and a second note holder with a damaged property as collateral.

Positives: 1) Provides higher protection against rent loss, property damage, evictions, etc vs.

The only exception(s) to this (if any) are the items reflected on theaccompanying Escrow Holdback Agreement, if applicable.Citizens is authorized to disburse the final draw in the amount of $________________ in accordancewith the executed Disbursement Authorization on file.It is understood that, in the event the Borrower(s) are dissatisfied in any way whatsoever with theremaining construction after completion by the General Contractor, their sole recourse is against theGeneral Contractor.Borrower(s) and General Contractor, jointly and severally, agree forever to fully protect, defend, andsave harmless Lender from and against any right, interest, claim, and each and every of them, ofBorrower(s) or General Contractor against the Lender, against all losses, costs, damages, and attorneyfees and expenses of every kind and nature which the Lender may suffer, expend, or incur under or byreason or in consequence of holding the remaining proceeds as provided herein."

Plus, high inflation and shelter costs hurt productivity, damaging economic growth.

If it's something the tenant damaged, then you can charge them. 

Since the home had Kitec plumbing in it I went ahead and had that replaced since the water lines were damaged during the tunneling for the sewer line replacement Work was completed.

That still leaves you the security deposit to cover any damages.

I have questions into them on whether they would cover it if the commercial policy denies it.Here's the exact language of the exclusion - "This insurance does not apply to animals "bodily injury" or "property damage" arising out of the ownership, use, loading or unloading, handling, or demonstration of domestic or wild animals, including but not limited to dogs. 

In my area it is common to have those foundations, I always see water damage when it is.