LLC provides separation of assets, not insurance. This is useful if you have a lot of personal wealth, and don't want to put it at risk if you get sued for the liability arising from your rental property. So by using LLC, you can save on lower liability insurance coverage.
In California, LLC costs $800 a year (regardless of where the actual properties are, since you are yourself in California - you'll have to pay the CA LLC fee). So if you're saving $800/year on liability insurance premium - LLC pays off. Otherwise, it is useful for the peace of mind, and in some way concealing your identity as the property owner (in California, you still report LLC members to the SOS, but it is not open on the Google search for everyone, one needs to pay a $25 IIRC fee to get that info, as opposed to some other places).
In additional, if you're buying with a partner, you'll need a partnership agreement and probably additional partnership-related bureaucracy (tax returns, etc). If you're forming LLC - all that comes with it as well.
Bottom line, with LLC, liability creditors from your rentals will never get to your personal assets (unless you were mismanaging the LLC bad enough to allow creditors to pierce the veil). With insurance - there's always a risk that you'll be sued for more than your coverage or insurance won't cover you for whatever reason.
I'm not a lawyer. You'll need to talk to a lawyer specializing in LLC formation to get a better idea of the liability protection it provides.