A licensed and insured contractor has insurance coverage for damage they cause while doing their work.

If the management company is properly listed as Additional Insured, the coverage will automatically be extended to both parties as needed.

Their insurance could cover this.Also check with your insurance to see if you have lost rent included in your coverage as well?

I know Colorado has been expediting a lot of climate related issues which is impacting home insurance coverage, so maybe just make sure to research that extensively before buying there.

I am looking for roughly 70% LTV coverage

Lenders usually look at the debt payment coverage ratio within a certain amount of time.

It cost 200 per year for a million dollars coverage above and beyond your regular insurance.

I'd think even where sub to or seller financing is most common, maybe the markets where it happens the most, maybe it achieves 2 or 3% max.The few times I see it in our area personally, is almost always on a 5-10 unit non-performing asset that someone can't get a loan on because of the debt coverage requirements.  

I'm focused on coverage not pricing though.  

A DSCR loan, which stands for Debt Service Coverage Ratio loan, is a long-term loan that uses rental income to qualify instead of DTI (Debt-to-Income ratio).