Don't you still need the claims adjudicator to assign a dollar value to the damage to your insured asset? It's not like a smart contract can figure out how much to reimburse you after your house gets flooded w/o input from a trusted, human authority. I'm not really sure what value the smart contract is adding here.
> they've been operating fine for several years
Well, it’s quite telling that the majority of big crypto hacks are uninsured. And they like to play tricks just like normal insurance companies (1). And the CEO got hacked like any random person would’ve (2).
(1) https://thedefiant.io/badgerdao-hack-insurance-payout/
(2) https://www.coindesk.com/markets/2020/12/14/ceo-of-defi-insu...
There's no reason this couldn't be expanded for other use cases, including home, car, etc. It really isn't limited to just smart contract data as you suggested.