This avoids all of administrative burden of confirming correct coverage limits, different effective dates, lapse/cancel, etc. 

Then after finding her auto insurance did not cover everything, and she let her renters insurance lapse (something that would be good to check on after having a tenant for a while) - she said she was taking me to court.  

And then there is the CYA reason: in case some sub gets injured, but had coverage lapse for whatever reason. 

I had my license for 6 years, and let it lapse last year.  

Licenses lapse notices from state commission 2.

The lease has expired and option for month to month would only be considered if rent was paid and it was not at time of lapse.  

For example they let the insurance lapse for non-payment, which I discovered 6 months later (gulp)... 

Many of them let it lapse because they find it's not worth it.

I'm not sold on the "no insurance" story unless it had recently lapsed.  

Sometimes you will also find a property with the right zoning and owner has let business tax renewal lapse which can mean you are no longer grandfathered in.