That doesn't pass the smell test for me - with a co-op, incentives are aligned for everyone. With liability that's covered by society, you create incentives that are directly opposed - e.g. you can drive a giant SUV that's more deadly to other drivers and pedestrians - and without mandatory insurance, you're getting the benefits of driving a tank-like vehicle while offloading all the costs and risks onto others.

You'd also need some new framework for dealing with high-risk drivers - e.g. instead of increasing the insurance cost for someone with a DUI conviction, you'd need to simply take away their ability to drive.

There also exist numerous jurisdictions with publicly provided insurance, e.g. https://en.wikipedia.org/wiki/Insurance_Corporation_of_Briti...