Now Foremost uses in house adjusters (unless there's a catastrophe and they need help) while Erie uses independent adjusters.

After the rehab, we generally re-apply for a landlord policy and cancel the first one.A big part of this being reality is huge losses to the insurance companies where a so-called "investor" buys a property cheap, insures it, and then a short time later has a catastrophic loss and a large payout from the insurance.  

It could be catastrophic and very very difficult to recover from.

With a deal like the one posted here, that could be a catastrophic situation.I see looking back that you mentioned house hacking with this property, so if that's the case then it's a different situation than the straight forward investment and i guess that is up to you what you want to do with it.

Our option is essentially a glorified catastrophic plan with a few "covered" doctor visits per year thrown in. 

It burned to the ground and was so catastrophic that they could not determine what caused it.  

You go buy a policy to cover just enough for what you owe on the property plus some fudge factor because you might have to clear the lot when there is a catastrophe.

Longer ones were a catastrophe, as I've stated before.I've loaned funds on my own before and done very well on high rate short term loans.

With cracks 1 inch or larger there could be serious structural damage that could cause failure in a wall or something which could cause harm to your tenants.I have a home in FL that developed a sink hole and our cracks were not nearly even a 1/2 in and we were forced to have a structural engineer certify that the home was still safe to occupy.Should something catastrophic happen you could be on the hook for a lot more than jsut foundation repairs.

I will not require the money and could continue to use it as a "reserve" funds for financing purposes and a secondary emergency fund in case of a catastrophe.