If I had been tracking the assets via accounting, I would simply make a journal entry showing the LLC's assets and liabilities going to zero and transferring them to the Holding LLC or the LLC Members.

Yet it's all a zero sum game, so think about it from winners & losers.

If you are taking care of things, any punitive damages would zero or very small.

I spoke to several of the insurance agents we use here in the Disney area and they have all said that policies are regularly being written and by all they hear, will continue to do so. 

Lack of down payment, lack of entrepreneurial personality, low tolerance for risk, looking for the magic key that fits their desires, just want to learn, sold "Castles in the sky" with a gibberish of disconnected statements that while true in a plethora of instances do not add up to truth in any one instance, fear of failure meaning not able to take a financial loss without going into poverty, never told up front how much money they will need to spend to buy the investment in addition to paying for the class.

Note that at these cap rates, you will see close to zero cash flow. 

Most everyone is right, things are pretty much the same, my tolerance is different. 

I have recently switched my insurance from home owners to landlord policy.

That said, if you only have a few "residential" rental buildings, most direct carriers can get you pretty low deductibles on their stand-alone policies (State Farm, Allstate, Farmers, Nationwide, etc.). 

I'd shop around that insurance policy as well.