Legal Question in Business Law in California

nonincorporated company doesn't shield you personally

Do you HAVE to have liability insurance? No, it's (probably) not legally required. SHOULD you buy some if you intend to try to market this product yourself? I'd say yes.

You say in your post, "If they sue the company I don't care because right now it's not worth anything," yet you also state that "[i]ncorporation or LLC is still too expensive for me right now." Keep in mind, then, that your "company" does not provide you or your family ANY legal protection for your personal assets, including your house. While you (probably) have homestead rights to your house, such rights would only prevent a judgment creditor from foreclosing on your personal home and forcing you to move elsewhere. Homestead rights do NOT prevent a judgment creditor from putting a lien against your house, wiping out your equity and insuring that, if and when your house is sold, the creditor gets the proceeds, not you.

One thing you might consider, if you really can't afford to market the product yourself, is to sell or license the product to some other, established company already out there in the marketplace. There are probably websites you could look up (although I haven't looked for any) for companies looking to obtain licenses/buy outright and market products such as yours. Good luck!

a corporation or LLC is really the only way to do it

If you want to protect yourself and do not want to give up ownership or control of the product, a corporation or LLC is really the only way to do it. I would call a few different lawyers and try to find one that will work with you. It is not that expensive.