Good question. I am looking into this option as well. I already dealt with my insurance-they didn't really have an option for nightly rental but cover it as a short term rental which upped my policy by about $300/year. I also upped my liability coverage which is included in that extra amount.
It seems logical to do this to protect your other assets. Fortunately I purchased this property through a local bank that I know will work with me however, changing "ownership" to that of an LLC might be an issue with your mortgage holder. Not sure how to approach that;maybe the anonymous call to pose a "what if" scenerio.
Please update us regarding any information you find out regarding this option and I will do the same.
Thanks