I have not sent a rent check out of a failed expectation of safety since my conversation with the police. 

My wife and I have been working as a team to acquire single fam properties over the last 2 years. We have built up a portfolio of 4 rentals which nets us a cash flow of about $2k/m. Now, my wife it at a place with her...

I’d put the house in an LLC, get a $1m umbrella policy ($300 for the year) and ensure it covers the pond.

So even if you get a quote from the same agent the seller has, your "rate" per $100 will most likely be higher.2)  If you will be getting a commercial loan, the lender insurance requirements may be greater than what the seller is currently carrying.  3)  Their policy may be too risky for you or over kill. 

While I'm working to find an insurance broker to help me find a bullet proof insurance policy when the time comes, I also wanted to get advise from other experienced investors about getting insurance as a landlord.

Just make sure you have a good insurance policy.

to address your liability, you buy an umbrella policy with large coverage, say $5M.

It can also be a safety issue for yourself.From your post you appeared more concerned about getting the new tenant in paying right away then taking some time to assess the condition from the last tenant to get make ready and wait to screen for the best possible tenant after the unit has been properly serviced.Sounds like they liked the idea of the credit and then moved in and saw much more items wrong with the property.

Granted, I agree these types of items may not be critical to the safety and structural integrity of the property, but still.

Keep it in your name, insure it, and add a large umbrella insurance policy for yourself off your personal homeowners policy.