you pay liability car insurance in case it wasn't the other guy. if you don't want to pay it, you can (at least in the us) secure a surety bond. you contract with a company for a (say) $100k bond for a few percentage points of that $100k as a one time fee. if you total someone's $30k car, the bond company pays them the $30k, and you pay the bond company $30k via some terms agreed upon.
United States