Originally Posted by
Steelclaw
The requirement for you to carry auto insurance isn't so much to protect you; it's to compensate the other parties when you're at fault. (You need liability insurance by law, not comprehensive/collision.)
Consider with no law requiring insurance:
If a driver hits you, they're at fault, and you suffer $25,000 in medical bills, there's a problem. If the driver doesn't have insurance, your only options are to sue the driver, or get your insurance to pick up the tab, if your policy covers uninsured drivers. The driver may not have the money or assets to cover your legal fees and the medical bills (even if you won a lawsuit). They shrug and keep on driving with no insurance. You, however, are screwed.
Your insurance company may pay up to your policy limit as part of uninsured motorist coverage, but anything beyond that is out of pocket. Your premium will probably go up as a result as well. Failing that, you're stuck paying out of pocket for whatever your medical insurance won't cover from the $25,000.
Requiring auto insurance means that your journey for compensation hopefully stops when you present your medical bill and busted up car to the other driver's insurance company, at which point the hospital gets paid, your bank account stays level, and your car gets fixed.