Good insurance will provide the protection from possible lawsuits.

I was sent this by a friend recently --"Owner hereby agrees to hold Manager harmless from, and to defend Manager against, any and all claims, charges, debts, demands and lawsuits with the exception of willful misconduct and gross negligence.

Property has an in-law suite, that’s why i bought it but flood factor risk report put me in panic mode. 

I had a similar question last week to split a SFH into a 3 bed 1.5 bath and an in-law suite 1Bed 1Bath.

I think you are risking a lawsuit as most people would assume some level of privacy inside a dwelling even if renting just one room.  

Do it afterwards and get it wrong and you're included in the chain of liability a potential lawsuit brings.

The lawsuit serves the registered agent but the case file and amended complaint will include the LLC members.I'm not saying you can't protect your privacy, but an LLC and out of state registered agent is a very thin veil for anyone looking for real privacy. 

I also told you my honest opinion about your chances of winning a lawsuit against a landlord who denies your wife on the basis of having no past credit history in the USA, and explained why.

Add million liability policy to your landlord policy if you worried about lawsuits.

If you do not do this, there is a risk of fines, and, worse than that, if the LLC is involved in a law suit, it can be invalidated for not being registered to do business in the State.