"Just because someplace costs $200k doesn't mean it costs $200k to rebuild from the ground up "
In Dallas (where I live), a structure usually costs much more to tear down and rebuild new than it is currently worth. For example, you might get a mortgage on a $250,000 10yo house here yet your insurance will be for $375,000 for that reason.
I'm not saying they are, but I'm sure if the structure was destroyed by a sub-letter there is a good chance the landlord's insurer would allege the tenant was negligent.
In Dallas (where I live), a structure usually costs much more to tear down and rebuild new than it is currently worth. For example, you might get a mortgage on a $250,000 10yo house here yet your insurance will be for $375,000 for that reason.