Doesn't insurance cover you for negligence?

Thanks - in this case, it may hinge more on whether her actions are considered "negligent" or not.

They have all provided documentation on the condition of her unit and the negligence on her part. 

The "difference" of interest in 3 years would be negligible but having the flexibility might be important.  

I have a tenant that has had some water damage due to a leaky roof, and at this point the damage is quite extensive. The tenant has been in there for eight months, and I have owned the unit for six months. They said t...

With virtually no cashflow risk your only other risks are liability for negligence, fire, tornado, etc. 

I'm assuming it's not very large, and the utilities consumed by the basement are negligible compared to the rest of the house.If you're looking to rent the SFH as well, I would say offer a rebate for utilities to the SFH tenant (maybe $100/mo or a percentage of the usage).  

You can ask them to fix it, but its likely going to be hard to convince them to do anything, since it passes code.Since most gas service is at an even lower pressure, ~5psi, any real lose will be negligible.  

I do all my own repairs, save plumbing, rent units myself, no management fees, my vacancy rates are negligible, nothing factored in for that. 

How does negligence come into play (legally) in all of this?