It's about $50/mon in the "low risk" parts of KC (ie, away from the river) - annoying that it eats into cashflow but would be way more annoying to have flood damage & no insurance.

Under most jurisdictions the deposit is  legally only permitted to be used to cover damage caused to the unit by a tenant.

At that time do a move in condition check sheet , they will be responsible for condition of unit from that point on for damages,, prior was with previous owner,, so a copy for you and a copy for them.5. have them fill out a resident contact sheet, names, cars license plates, and phone numbers of all people living in unit6.

Reply in writing that you will be moving AND leave the unit at least broom clean and expect your deposit to be returned on the day of the inspection.The LL should be happy to see you've taken good care of the unit and issue a check upon surrendering the keys.Understand however, if there are damages, the LL can delay the refund and deduct the damages from the deposit.

I believe the risk of not getting replacement value is if there is partial damage.

I owned a carpet cleaning / water damage restoration company for 10 years.  

From the your original numbers, looks like you'll be keeping right around 40-45 regardless of the plan, so aside from potential damage from bad tenants, what would be other reasons to not keep the house?

Do you recommend mandating renter insurance to cover cost of damages?

No one was hurt and the property was badly damaged.  

Specifically, I'm only interested in smart-home features which help to minimize the risk of home being damaged or minimize our response time when those things occur.