I think if the majority of Americans were actually fiscally responsible/stable enough to achieve this goal, it wouldn't be a horrible idea. I see some downfalls to it, but my biggest fear would be that a very small portion of the population could destroy the entire structure. Unfortunately, as a nation we are not responsible or stable anymore, and as relevant as an idea as this might be, it's a pipe pipe dream until that can be changed.

I could also see this putting a much greater strain on the legal system to help resolve petty lawsuits where an insurance company would normally decide who was at fault for an accident or loss.

Also, insurance companies make their money through investment funds fed by premiums, not just the premium they charge every month. If they did not take your premium and put it into an investment fund, most insurance companies would go belly up inside of a year. The up side to this is that they can provide more coverage than you are paying per month in the case of catastrophic events...whether they do or not is another discussion, of course.

Personally, I'm much more in favor of the idea of setting some basic standards/restrictions that they have to live within and holding them to those. I don't know if that's via gov't, or via some sort of private sector committee, but I honestly don't think the goal is achievable with our current fiscal situation.