I don't need/want my insurance company to be involved in every minor defect the house goes through, I just need the insurance to cover catastrophic loss like a fire taking the entire building.Of course I also don't live in areas that are prone to hail, flooding, tornados, or any other dramatic weather conditions.

In an attempt to level out the situation the unintended consequences are going to to be catastrophic.  

Therefore, let me just tell you what I'd personally do if I was in your situation, according for what you wrote.First and foremost, diversification is always a good idea to avoid any potential "catastrophic" outcomes.

I was thrilled to have everything covered incase of a catastrophe.

I definitely will make it known to inform me of ANY repairs that are needed in the future before it gets catastrophic.

Also the house has a crawl space so the likelihood of a catastrophic flooding event is very implausible.Rental 2 2-1 bathPurchase price: 130,000.00 approximate value now 170,000.00Down Payment: 26,000.00 (20%)Interest Rate: 4.1% 30y/fixedCurrent balance: 99,600.00Current Tax: 2,482.00/yearInsurance: 750.00/yearUtilities: garbage 40.00/month renter pays all other utilitiesCurrent Mortgage w/escrow: 828.23/month 9,938.76/yearRental Income: 1,225.00/month 14,700.00/yearProfit 356.77/month 4,281.24/yearFor anyone willing to take the time to look at my situation I am looking for input on my next move.

If property owners banded together this would be catastrophic for the local governments and possibly force them to rethink this.

Save your claim filing for the losses that are more catastrophic in nature, or for your more high-dollar losses. 

Insurance is for catastrophic life altering events.

I even asked what would happen if the rents catastrophically dropped 50%, she said they would still supplement the rent if it is below the rent range they initially provided b/c they ultimately want to satisfy their customers.