Here are the quotes I received 2.5y ago.Ultimately I decided that unless it's >8.0, the damage likely won't be greater than the deductible + premiums paid. 

I think it interesting the lenders (mostly F/F) mandate insurance, but not earthquake insurance even when you are close to significant earthquake faults.It is my personal view that if a big enough earthquake hits that it causes significant damage to many homes that it would be declared a disaster and cheap loans and options are likely to be available.It really is a calculated gamble.I have a fairly large umbrella policy.  

There is only really a decent shopping plaza a block away. 

If they want to move then I would just credit that deposit to them after they move out and you take inventory of any damages. 

Is the security deposit large enough to cover the damages you want reimbursed?

But it happens in the bond market too, and bonds are more similar to homes than stocks, they trade in large blocks, some aren’t super liquid, but still, bonds don’t have leaky roofs and you can buy and sell them way faster than you can buy and sell a home.

It had some damage that we’ve repaired.

The tenant would be the one to receive the deposit back at the end of the lease (or not, if there were damages).

Anyway I have about $135k available on my heloc. sale price on the duplex is $279,000, so 20% is about $56k. the house is perfectly livable as-is, but at $60/sqft and properties on the block selling for $140/sqft i think there is room for some forced appreciation. the building is currently a three-floor duplex townhouse, one unit is the ground floor and unit two is the top two floors. all floors are basically the same floor plan. the second floor has a kitchen/laundry stacked above the first floor kitchen/laundry. on the third floor, the room is in the same place and empty, but utilities (water gas electric) are already run and in place for adding a third kitchen/laundry, so conversion to triplex would be simple as installing cabinets and appliances and building an exterior staircase up to the second floor rear deck. the three 2bed/1bath units would rent for $1000-$1200 a month each, conservatively. we would have to find somewhere else to live for that to happen, but that is our 1-3 year goal anyway. would it be better to make the bank loan smaller with a bigger down payment from the HELOC?

Note, even if insurance pays for all the damage your property suffers, you still lose.