Legal Question in Landlord & Tenant Law in California

If the homeowner has a mortgage or line of credit on the property, then the terms of the loan will always require insurance. If the property is owned free and clear, then there is no legal requirement, but unless you want the first person who trips and falls on the steps to own the house, or to lose everything if there's a fire, you need insurance. You should also require the tenants to carry renters' insurance and provide you with proof.

It would be foolish to have a piece of rental property and not insure it.