I really struggle to think of how someone could either cause more than $1M in damage or sue me for more than $1M in damages or injuries just by using my condo.

- How much will the neighborhood damage an appraisal value of a home?

You will need to mitigate your damages to show the court good faith. 2- I’m assuming the PM also drafted the contract for the tenant on your behalf?

Not following this would give a housing court judge grounds to award the tenant treble (triple) damages. 

That one to the door doesn't worry me as much as the one in the basement, although it would be smart to patch that one up, to keep water from doing further damage to the property. 

My concern is addressing the scenario when I need someone to move out or I need to be compensated for property damage, while still maintaining the living agreement format and binding nature of a lease. 

Figure out which damage is normal wear and tear; ignore it.

If the tenant caused damage or liability 3 times for different things, that should not necessarily affect your insurance premiums. 

its none of your business how your tenants live as long as they abide by the lease (an d you dont see any indication of illegal activity ie physical abuse etc) . 

Yes, the $5,000 worth of work is a guesstimate, assuming I'm only doing touch up on flooring, water damages (maybe), etc.