I think I read somewhere that an insurance university is not compulsory, but if you feel better having one, then you might as well put your second favourite down as your insurance. If you are confident that your favourite university is definitely the one with the lowest grade requirements, then DEFINITELY use this as your firm. Your favourite = your firm.
Be grateful for the low offer, it helps take pressure off you. But, you still have to attain those grades, ideally better though. So, well done!