I've just started driving in the last few weeks, and insurance has been an absolute nighmare - Not due to a lack of people who want to insure me, there are hundereds of them, but because of the price; I've had quotes at the absolute lowest of £2,500, and at the highest of £70,000 (per anum).
This is driving a 1.2l car with a value of around £8,000 - It's not especially valuble of expensive (although it is a nice car).
This is becuase I'm within a certain age group (17-25) - Fair enough, it's the group that is statistically most likely to have accidents, and premiums should reflect that to a degree, but the cost is unrealistically high.
I'm in the fortunate position of having enough money to pay for this, with the help of various people, but for example lets take someone who's family is earning minimum wage, and has just bought a £400 car from a garage somwhere. The insurance quote is still around £2,500 (I checked). So, do you pay 6 times the cars value per year to keep everything legal, or do you not insure it, and risk a *gasp* £80 fine? Of course, if you hit anything, you're in trouble... Unless you drive away, and let that person deal with it. (As has happened to my parents, twice).
Of course, there is the 3'rd option - Don't drive, but that's not one all that many people will be willing to take.
If the cost of insurance keeps rising as it is, more people aren't going to bother with insurance (and others won't drive, and others will cough up). To avoid that, either some limits have to be imposed (not possible, it's up to the company, not anyone external), or cases need to be considered more individually than the current system (no claims bonus... Which can be wiped out by an uninsured driver hitting you). To me this seems most realistic - I have friends who are excellent drivers, and are careful, stick within speed limits etc. I also have friends who are the opposite - Drive through residential areas at 60, down normal roads at 110, and are generally just stupid, and indeed those who are just bad at it (swerve into the curb every time a car comes the other way, go into neutral on the motorway because 'I don't want to do any faster!') but at the end of the day, the good responsible drivers are paying for the irrisponsible bad ones.