Landlord just sent a note to require all renters to have an insurance coverage for the landlord property damage. Is it legal?

You say that the requirement is not in the current rental agreement. If so, then it may not be enforceable. But, what kind of agreement do you have? What is the term? Six months? Month-to-month? What? And, when was it last renewed? The answer to those questions could have extreme bearing on the case and your situation. You need to take your current lease, and the notice, to be reviewed by an attorney. I could assist you, if you want.