My point was, I'd need two heat sources, which is pointless. Natural gas it is
I highly suspect that your insurance guy thought that you were talking about the house vs. the unheated shop/garage. You of course need a thermostatic central form of automatic heat for the house. Before you go spending money, make it clear with the agent what you are talking about.
The fire code prohibits solid fuel heaters in a garage. Stupid rule but the rule is very clear. What is not so clear is the definition of a garage. Many insurance companies do not allow solid fuel heaters in any outbuilding. State farm is an example of this. Others allow solid fuel heaters in any outbuilding/garage/etc. so long as it is permitted. Farmers insurance is like this.
First things first, never call it a garage. Call it a shop. Don't lie about anything.
I live in Pierce County WA and got a permit for a woodstove in my pole barn. Had to switch from state farm to farmers to keep everything insured.
On the pellet stove. The biggest ones only make a small amount of heat, like 50,000 btu so no pellet stove will be too much. Bigger the better.