It's almost like the insurance industry is large, wealthy, and politically well-connected enough to capture regulatory bodies in order to insure the existence of markets for its produc... wait a second...
That's not what they do, though. They are in business to make money, yes -- but they don't always. A bad hurricane season and they can (and do) lose billions.
http://www.iii.org/sites/default/files/paper_HurricaneAndrew...
Katrina: $47.6 billion paid out. Andrew: $25.0 billion paid out. Ike: $13.1 billion paid out. (Constant 2011 dollars.)
See discussion of "wind pool" in the document, by the way: the way Florida works is by having a semi-governmental organization insure wind damage and letting private insurance companies sell "we'll insure any risk as long as it isn't wind damage" policies.
In theory anyway.
(I do not live in New Zealand).
Take your own risks in life. Don't drive a car you can't afford to replace.
In the "no mandatory insurance" scenario, you're taking the risk that someone else may damage your car. So don't buy a car you can't afford to replace.
FWIW I didn't downvote you. Your post is borne of ignorance of how it works in the US, which is actually enviable because it means your healthcare system isn't an absolute wreck :-)
It's great.