
Do you feed any dry complete food? A probable culprit for storage mites ...
Milo may easily have bitten by a flea or fleas - they don't after all remain on the dog. It may not even have happened at home, possibly in the garden or a walk. If the flea doesn't spend much time on the dog, the dirt left would be none or negligible. Fleas feed and jump off, commonly cats, foxes, hedgehogs carry them.
For dust mites and potential flea eggs etc, not only vacuum regularly and thoroughly but also steam clean everything too, particularly nooks and crannies of furniture and around skirting boards, spaces in floorboards etc.
If you're worried about flea treating all of the dogs discuss with your vet - if only Milo and you're sure there's nothing on him and can get swiftly on top of anything lurking elsewhere, ask your vet if you can go that route first. It's a judgement call and not one I am qualified to steer you towards as your vet knows more than anyone on here.
As to insurance covering flea treatment I suspect not. I once had a dog requiring additional worm treatment in case there was a presence of giardia, the insurance took the worm med off the total bill despite being advised it was part of a different treatment and a precautionary measure only.
HTH, good luck with Milo - sorry he's been having such a bad time but please God that's soon going to be behind him :)
Teri