We have just purchased our first buy and hold. We are in process of completing renovations and will put it up for rent soon. I saw that several others recommend Replacement Cost Coverage vs Actual Cash Value Coverage, however, our property value is around 55k and we most likely would not rebuild. It is in a class C neighborhood. One insurance agent I spoke to said to get the highest possible liability coverage ($500k.) Another quoted me for $25k and said via email, "I would not let this worry you. In 20 years of selling insurance we have never paid a single liability claim on a policy. I am the largest independent insurance agency in Oklahoma too and never once have they paid a claim. To pay a liability claim you have to be found at fault or liability for a tenant's loss. The burden of proof is so high that this never happens."
I do full replacement coverage rather than actual cash value. Part of this is that if something catastrophic (but not total loss) happens, I don't want an insurance company telling me how much they will/won't pay based on the age of my systems. (if you have older systems/roof, they essentially do the coverage based on the current value of those systems instead of what it's going to cost you out of pocket to have them replaced). This way, I know what my deductible is and I know that should I have a "claimable" (if that's a word) incident, I pay my deductible and the insurance will cover the rest. With a cash value policy, they may or may not cover your expenses. If I were in a position where I had significantly more units/cashflow or huge cash reserves, I would re-consider, but during the "growth" phase of my rental business I don't want to take the risk of having to pay those kind of expenses out of pocket.
I also went with the highest liability coverage because it helps me sleep better. I probably don't need as much insurance as I have, but I would rather be over covered than under covered.
I use JTP insurance in Edmond. The owner's name is Jonathan Pannes. He was tremendous in helping me hash out all of my thoughts on insurance policies and getting me into policies that I felt comfortable with.