I think of insurance as a cost limitation device. In case of disaster it limits the potential costs to something manageable in exchange for a manageable monthly payment. As you acquire more expensive things (house, car, etc.) those potential costs expand significantly. With vehicles your car insurance also covers some medical expenses after an accident, as well as covering any other partie's vehicles and medical costs should that be the direction the claim goes

I can pay a couple thousand dollars a year to insure my house but I definitely couldn't have paid the 40k out of pocket to replace my roof, siding, a couple of doors and windows and repaint the garage after a recent hail storm. Every vehicle I've lost to nature's chaos had a loan tied to it which would've been very difficult to both continue to pay back and repair/replace the vehicles. Insurance limited those costs