First I would check with more than 1 insurance company on coverage for a non-owner occupied home. Second I would say their are many tax advantages to having a rental. I have many rentals and the tax benefits
are astounding. I would contact an tax accountant and go over the pro's and con's of renting this property.

It looks like you need some advice from a couple of people. One is going to be an insurance agent. You can get an insurance rating on the companies to determine how financially sound they are before you pick one. Find one that is either guaranteed by your state (if they have this like Florida) or has a B+ to A+ rating. This will protect you and your property whether it is a rental or a primary.

Second you need to find out the tax liability because rental income is taxable but rental payments are not tax deductible so find out first if benefits you for tax reasons to hold the house or take a hit.

Third talk to a realtor about the time on market - if it seems like it may take a while to lease or to sell - you may jeopardize any job opportunities if you don't know the time on market for your area.

Diana,
Depending on your risk tolerance this sounds like a scenario where selling the home would make the most sense. If you decided to keep the home it sounds like (at best) you could find some way to insure the property but that the "what if's" will continue to linger in your mind. Given the current market conditions in real estate in most areas, you may have to take less that the ideal price for your home, but you'll have a great buying opportunity after you sell the house and liquidate the cash.

Diana,

You require the insight of a local real estate professional. Someone that knows the area well and has a realistic understanding of the marketability of the home and how much it will bring in today's market.

With accurate sales information it will be easier to project the net difference between selling at a lower price and renting.

Good luck