It's a great supplement to retirement, or it could just be your retirement plan.

Require tenant to pay for an entire year of coverage up front.

However, they found only one insurance company (B++ rated) willing to insure the property and noted that would require a detailed inspection (leaving me anxious that they may drop coverage post close if for any reason my property does not pass inspection).

There are Specialty policies (often referred to as Excess or Surplus Lines) that should be able to write coverage.  

Doing this:   a) Keeps them from blowing their money on a house they can't really afford in the long-run   b) Gives them hands-on landlord experience which will supplement their offseason PMC job4) From day one they should be reading everything they can about RE investing - maybe here on BP.If they do all this, they have the highest probabilty of sustained success in real estate investing. 

With no coverage, expect the lender to sue you for their loss. 

On the commercial side 5+ units bankers will often mention debt service coverage ratio (NOI/debt service) which may be in the 1.2-1.3 range last time I was looking at it.

Which material would you have less leaks, challenges with insurance coverage, longer lifetime?

Goal is to brrr a few sfh's per year to supplement my retirement.

Debt Service Coverage Ratio.