Those events just aren't as common as HN believes, so the driver of a KillMax HighBumper 9000 doesn't pay much more in insurance than the driver of a Civic.
Hardly anyone has assets of $10 million, so they do not have the assets to insure. Many people do not even have assets of $50k, so again, why would they need insurance? If they get a judgement against them for $50k, they are bankrupt. That's what bankruptcy laws are for.
If your life is worth $10 million, you need to be the one to insure it for $10 million. Not the working class person who has no assets.
I see forced purchases of insurance for people with nothing to insure as similar to debtor's prison. Obviously not as extreme, but the same concept.
That's probably because you're looking at it entirely wrong.
The third-party cover in insurance is not for you (the driver), it's for the poor sod that you turn into a pavement stain.
If you kill them, their family has had someone taken away from them - would you be happy with $50K for the loss of a spouse?
If you don't kill them, but inflict life-changing injuries, the resulting lifetime healthcare costs could easily be more than $50K.
When you take to the road, you do incur some risk, but on average you pose more of a risk to others, particularly if you've chosen to drive a car that you can't see in front of properly.
The UK introduced compulsory third-party cover in 1988. Even back then, the cap was £250,000 - it's not led to any societal problems (although, the accident rate in the UK is far, far lower than in the US so policies probably are going to be cheaper).
I do agree, though, that 10 mil is definitely pushing it a bit far.
If that was an issue for me, I would make sure that I had the appropriate level of insurance for that event, rather than relying on the hope that some random driver on the streets where I live would have the appropriate level of insurance. Many of the drivers where I live have no license, the cars they are driving aren't registered, and they have no insurance.
That's a law enforcement issue (they don't enforce laws here either), not an civil one. The insurance thing is my responsibility.
Damages to the car and driver are either covered under separate provisions of insurance or come out of pocket.
If you get run over by a car in California and you're lucky enough to get hit by one of the 83% of drivers that has car insurance, and one of the ~90% of drivers who stop for an accident, the insurance company is required by law to provide you $15k in coverage for your injuries.
There aren't any insurance companies that will even write you a car insurance policy that will cover the potential costs for a very serious injury. It is too risky for them. Heck, the maximum coverage you can even voluntarily buy in the US is lower than the minimum requirements in some other countries. Some countries require millions or tens of millions in coverage, some require unlimited liability. In most of the US many insurers won't even let you voluntarily buy more than $250k/person, and are only required a tenth of that.
(Seriously, it's quite magical. A high-limit umbrella policy plus a minimum-limit homeowners' or renters' policy and minimul-limit auto policy is generally less expensive than moderate-limit policies without the umbrella.)
The reality is, in many parts of the US, half or more of drivers have minimum coverage or zero coverage.