Generally (in the United States), an owner-occupant purchases homeowner's insurance, which covers damage to the house, liability issues, and contents. A renter purchases renter's insurance, which covers the renter's personal possessions. A homeowner renting a house to someone else still needs homeowner's insurance to cover damage to the house and liability issues, and the renter still needs renter's insurance to cover his/her personal possessions.

However, I'm not an insurance agent, so this isn't specific advice. Check with an insurance agent for your own particular situation.