If they actually did re-title the house into the same LLC as their rental property, they should have a conversation with their insurance company or agent.  

Changing the ownership of the house into the LLC would require a change to their homeowners policy.....  Their homeowner policy would have been written with their individual names as Named Insured is likely worthless... (that means if the place burns down, they could be SOL)... 

Because the LLC contains multiple properties it would not be eligible for most HO insurance companies.