If you need the cash flow for your monthly living expenses then yes, of course, but if you're buying the property for your retirement 20-30+ years from now you get so many other long term benefits not achievable by other investments.Your insurance rates may have been factored for homeowners insurance vs a landlord policy (property & liability).

His only request was that I take out a life insurance policy equal to my half, basically, or equal to what he loans me if we don’t actually partner, and make him the beneficiary.

I am a fan of a good umbrella policy.  

Insurance- most storage unit insurance policies do not cover vehicles.

We're in the process of renewing our insurance policies on our apartment and commercial properties throughout Florida, and I'm being told to expect 15% increases across the board for property, liability, crime, etc. and likely larger increases (several hundred percent) on the umbrella policies.

Be sure to let the agent(s) quoting the policy know about the short term rental. 

I'd rule out the STR in Van due to 1) price/cashflow 2) unfavorable policies 3) Like you said, its big capital locked up for a small property with limited usage 4) STR is either a TON of upkeep(cleaning, marketing, etc) or a TON of expense related to prop mgmt in an already tight cashflow scenario.  

About the “no cats” policy- why not?

I'm house hacking a duplex in huntsville.From the link Homestead Exemption Policy    One can be granted a homestead exemption if the single-family residence is their primary residence on October 1 of the tax year for which the property owner is applying. 

Banks can change on a dime their underwriting policies and it's frustrating when you're half way through the process.