I generally do $125 per sq ft on a condo for dwelling coverage if it helps at all.

I have a listing for one that I think could be converted into a duplex plus a small mobile home park, but I don't know the clearance for services and the dwellings required in Texas. 

Requires patience and potentially looking for off-market deals.Accessory Dwelling Unit (ADU):Pros: Offers privacy and less noise transfer.

Hi all- We closed on our first STR literally one week ago and today I was informed by my insurance agent that our homeowners insurance company cancelled our coverage because in their words "A HOME/DWELLING RENTED LESS THAN WEEKLY IS INELIGIBLE FOR COVERAGE."

I have alot of experience with investment property more on mult-family dwellings in the mid-west. 

In Columbus, we take all of these issues you just mentioned and build a stacked triplex that has high density (42 dwelling units an acre), public utilities, higher rents per square foot, cost per unit under $115k basis for the investor (not $300k for a single family) and that is attached here.

This room is usedsolely as a hotel, motel, inn, or similar establishment and isn’t a dwelling unit."

Is an ADU (accessory dwelling unit) in option for your home?

See screenshot below from https://bouldercolorado.gov/services/accessory-dwelling-units. 

The most likely form will be a Dwelling Fire policy (also called a Landlord policy by some companies).For your family, you may need to get a renters policy.