The GP said that having too many renters increases the risk of property damage (which is very true), to which you replied (essentially) - why worry, let them damage, the insurance will pick the tab - to which I said that it's the actual damage, not the cost of repairs that is an issue.
Rules regarding the rental of private property to a private party is a private matter in my opinion. Private parties already regulate the user of communal property thru vehicles such as a HOA. If you have a condo then the HOA can decide if renting is appropriate. Having the government dictate how your property can be used is more disturbing than having to attend a HOA meeting. Sure, you might agree with this particular regulation, but how about when the other political party takes power and decides they want to use your property differently. No thank you.
