Get a good insurance policy and forget all about the LLC hype that gurus teach because an LLC or trust will not protect you if someone sues you.Joe Gore

In general it is a very good policy.

It's just a policy I have for myself.

That was with Allstate, who also has my primary and auto policies.  

It is pretty much a role of the dice as to whether or not this type of contractor has solid insurance and I would be very diligent in making sure this type of contractor is properly covered and ask your agent to review the actual policy in addition to the certificate. 

From my searches it seems there are two types of policies - Rental and Landlord.  

There are usually laws regarding minimum standards for plumbing, air flow, and heating, fire safety standards, etc that are affected by the number of unrelated people renting part of the same dwelling.

I just have an umbrella policy with my insurance for my STR.On the insurance question, I believe you need to have the umbrella policy with the same company as your primary home owners insurance.

Yes, the builder's preferred lender has offered me this:"To do it, I had to go with a FHA loan, buy the interest rate down to 4.5%, and increase the down payment to 11%...we will pay the Owners Title Policy plus $2k towards the closing" costs."

It looks like some people are recommending to hold in your name and just have good insurance and possibly an umbrella policy.