The public adjuster will argue with the insurance adjuster and get you the best payout.

CA has the highest sales tax rate in the country.

There's no guarantee that the liability coverage will pay out unless the tenant is negligent, at fault, etc.Mold is typically not covered by insurance at all. 

Hi Nate - It'd be worth asking the lender for a detailed breakdown of closing costs for this program, as well as an estimate of the interest rate you'd get with today's rates (they'll probably need to pull your credit to do this).

The default rate is only 1% per month which is 12% annual.I assume there are more pages to that agreement

Rates change all the times, but if you had a rate lock, that really doesn't make any sense to me.

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

If this is financing for a stabilized property rate carries more importance but rate combined with origination fees, pre-payment penalty and term in which you intend on keeping the loan in place are all considerations which together should help in deciding the best financing option.

Credit score and loan size can also affect what rate you may find. 

Keep in mind a HELOC rate will be much higher because of the CLTV and risk.