This sounds like a pretty bad case of ready, fire, aim to me.
The right time to discover how to be a landlord is definitely before you turn your home into a rental. With no offense intended, I don't think you'd going to need to worry too much about plowing all those extra rent dollars into the mortgage. You have a PITI of 1311 and a rent of 1450 (and 1350 if they pay on time? Why?!?!?). Add to that vacancy, repairs, capital expenses, turnover expenses, and the additional annual insurance cost of switching your homeowner policy over to a landlord policy (which you absolutely MUST have) and you are going to be pretty substantially cash flow negative over the medium and long term.
Yes, you definitely need liability coverage exceeding the maximum amount you honestly believe you could be sued for in a liability case. Someone trips off your porch and becomes paralyzed? You may find yourself on the losing end of a million dollar or greater lawsuit. That's not to scare you-- I think landlording is awesome-- but it is definitely something that you should go into with eyes wide open, and you should be working to protect yourself against liability.
I carry $1 Million in liability coverage on each property, and a $2 Million umbrella policy on top of that. Whether you need an LLC I'll leave as an exercise to you, but you may want to consult with an attorney (and an accountant) about the pros and cons of doing so.
My advice to you would be to get rid of the on-time discount at your earliest opportunity. This property is already going to eat you alive even without it. If the property doesn't make sense as a rental (which it doesn't appear to), sell.