If your tenant has an attorney you had better believe he will raise it.Some believe it is a magic bullet against liability and they may not carry adequate insurance coverage.

For some in-depth coverage of the rules that address some oft-overlooked nuances, you can have look here.

Insurance agent, said I can carry more than enough liability coverage to cover contingent liabilities.In addition, my bank does not do commercial loans for real estate.In regards to the LLC , I can secure a loan, but will be paying a higher rate and have a 25 year term.

Portfolio lenders use debt service coverage ratio instead. 

We are not able to get coverage even though we Will be forced to buy it even if it burns down between now and when we get to take possession of the property. 

Flooding is a catastrophic event and the cost of coverage is generally very reasonable. 

The only item that really kind of caught me off guard was they had this pet coverage that was different.

For the rest of us, the portfolio product works on debt service coverage ratio and not on debt to income.   

Most Insurance companies will not write coverage for particular breeds (varies between companies).

Part of the thing that I feel like it's important for you to understand Malcolm is that once people get established, the Debt Service Coverage Ratio becomes important for their access to capital.