[whoopdedo]

You're #1 states two things as if they are the same. Your final statement seems to imply that the affordability of auto insurance derives from the above conditions. Except you make one glaring mistake: auto insurance is not regulated. Rather, the rates that insurers can charge is highly regulated.

#3 also doesn't make sense because people don't buy the auto insurance that they want. They buy the insurance that the state requires them to pay, and maybe a little more if they want something better. But the government mandates a minimum level of coverage which the insurance companies need to avoid either going insolvent or charging much higher rates than they do.

[lsiebert]

That's false. California, for example, has regulations on auto insurance rating factors and discounts (banning, for example, discrimination on sexual orientation or discounts not offered to the general public), among other regulations.