This would conceivably be true for car repair as well. A mechanic is incentivized to order as many repairs as possible for a car.

So why don’t they?

They do. Car mechanics have a notorious reputation for doing repairs that aren't necessary, or for breaking something so that the owner has to come in again soon.

is also incentivized to serve their customers well by selling them only things that truly benefit them.

Yeah, there's a natural counterbalance that means they don't want to be seen as dishonest. Similarly, an insurance company is counterbalanced against trying to prevent every test or procedure by also wanting to be seen as honest.

We don’t need insurance companies in all those other industries

You're aware that car insurance is a thing right? Any industry where the charges are going to be extremely high is going to involve insurance. Cars are fairly expensive devices, and so there's car insurance, and if you're in a big accident your car insurance will pay for the repairs. But, the car insurance will keep an eye on you to make sure you're not committing insurance fraud, and also limit how much the car repair shops are allowed to spend to repair your car.