I would propose a discounted rate for "ease of management" - perhaps $150/mo for the additional space.

So there is no way to say for sure, especially in light of Government legislative help that might come along.Just my 2 Cents.

First, the answer will vary based on whether or not the Insurance policy being proposed is a Commercial policy or a Personal policy.  

What you are proposing has been used for decades.

I've thought about finding a partner but am unsure how to go about it as I don't have the experience or a set deal to propose to anyone. 

Connecticut recently passed legislation that allows “Accessory Dwelling Units” sometimes referred to as Auxiliary Apartments.  

This is a huge expansion of what this legislation has traditionally called for.

This is how you establish fair market value.Options: if you don't want to accept fair market value, reject their proposal and go back on the market.

Could legislation come down the pipeline that makes OOS investors have a harder time? 

What we are seeing here in Massachusetts is consistent efforts to pass legislation like 2% real estate transfer tax, tenants right of first refusal, some sort of rent control, a form of eviction moratoria etc.