Honesty is the best policy. 

Naborly obviously makes up policy on the fly to serve their purpose.Any suggestions on what I can do with this negligent Tenant Search that I relied on and is costing me money now to evict a person I would never have accepted if I knew they were a habitual rental free loader who had been evicted 3 times?

Tell them this is your policy with such transactions, and should be anyways. 

Our policies are well documented and they would have been explained to the tenant, and an acknowledgement signed, when the lease was executed.1) Rent is due on, or before, the first of the month;2) If any balance remains outstanding as of 17:00 local time on the 4th of the month, a late fee of $50.00 is assessed (for a first offence).  

Claims on the insurance policy for default are not the same.  

we have a strict policy regarding timely payments. this is the 1st time this has come up, but cannot become a habit.maybe i am not the best with words, but it sounds good to me.

Dumb policies such as: they require you to put a notice up on your vacant rental, saying that it's a vacant property.

(I had this with my other policy, but am considering dropping now.)

(I certainly like that option).lol   Also...I am paying $400 a year on this abandoned and boarded-up house....in an area with minimal traffic and hardly any neighbors....should I save my money and drop this policy?

Get a landlord policy and maybe an umbrella for additional coverage.