Generally good for catastrophic damage -- fire, fallen trees, etc.- General Liability:  This will cover any damage you or your contractors do to other people's property. 

I wonder if at some point the amount can be less due to having "economies of scale" with income from multiple units available to cover catastrophic situations or prolonged vacancies in one or two units.

Worse, what about unexpected personal losses not even related to real estate (job loss, health issues, catastrophic event, etc.)? 

A 10-year bond is currently at 2.34%.Outside of anything catastrophic (North Korea acting out, Fed throttling the fed fund target rate, trade war with China, etc) this bull has at least 5-10 more years before the start of it slowing down.

I'd rather over insure then be stuck with a bill after a catastrophic event.

Spend the extra money, it could just save you from something catastrophic down the road.  

And I think this one's important because a lot of different investors are buying industrial land where the value is really in the land, and you may not want as much insurance, because there's a highest and best use for the land, so if there was a catastrophic destruction, you don't want to insure for the full replacement cost of that type of building, because you're planning on redeveloping anyway.

The exterior wind damage from the hurricane is significant but not catastrophic. 

Pretty much the regional tier 2 hubs in the strongest employment states are the strongest candidate cities.Now as for your capital appreciation thesis:I'll be a contrarian and bet that tier 2 cities will not lag behind tier 1's in the future, either tier 2 rises significantly, or tier 1s fall catastrophically.

Which is fine, they probably think the effort we put into RE is stupid and too much work.Most people don't think about the fact that it will take them 13 years to pay off their 2-3K credit card, let alone some catastrophic misfortune leading to joblessness.