&gt; It really feels like less insurance and more government mandated protection money;<p>Car insurance is different from other forms of insurance. The reason car insurance is mandatory is because otherwise, if you hit someone or damage their property with your car and they successfully sue you, they could very well end up with nothing (if you&#x27;re broke). With insurance, that person is guaranteed to get a payout, because the insurance company is well-capitalized enough to be certain to pay out.<p>In a world in which everyone drives, this is mathematically equivalent to everyone purchasing insurance against damage that happens <i>to</i> them or their car by someone else. The reason it&#x27;s not structured this way is because (1) not everyone drives a car, and (2) it creates a moral hazard problem (having car insurance - and the consequences to taking actions which can raise your premiums - serve as a deterrent to bad driving.)