Yes, insurance loss proceeds can be assigned.

As someone in the process of setting up a vacation rental, I'm trying to understand how net operating loss works with respect to whether or not the property is considered a "home".Let's say I put $15K into the house replacing the windows with lead paint in them in order to get the house ready to rent.

And to sell will most likely produce a loss...

I'm so sorry for your loss.

I know hard money and have actually spoken with someone but it seems so much of a loss… Should a consider a contractor with financing partnership?

Business losses can be carried back 2 years and forward 20 year for tax purposes.

That bank walked on us because one of our properties showed a loss on our tax return.  

The key is teaching tenants in such a way that they understand the impact that these loss prevention items can have on them...

You would be looking at least 15K in transaction costs - 6% commissions not counting holding costs, fix up costs or seller assistance.One thing is to look at your tax situation and make sure you can benefit from the "paper loss" you will have on the rental from depreciation. 

Further, if the NOI is high relative to the cost, and the NOI is Gross Potential Income - Economic Losses - Operating Costs, could it be that either the GPI is high, or some of the losses are low?