An even more insidious than normal form of insurance, in that its prices are grossly inflated whenever possible (by age discrimination, sex discrimination, or by the occurence of an event that triggers an actual insurance payout), and in almost every state within the United States is compulsory (that is, you can be put in jail for operating a motor vehicle without insuring it).
There are two forms of car insurance commonly available: liability and comprehensive. Liability insurance pays up to its stated limit if an insured vehicle and person (both must be normally covered under the same policy) is involved in any accident which causes damage to another person's body or property, and the person operating the insured vehicle is found to be liable for the accident. This form of insurance is actually the more useful of the two, as it can help protect the insured from lawsuits by ambulance chasers and their clients.
Comprehensive insurance pays up to either its stated limit or the actual cost of repairs (whichever is less), less its stated deductible, when the covered vehicle is damaged in any way. Most comprehensive policies will cover any accidental damage, and any intentional damage not caused by the insured (that is, the insurance will pay for repairs when the car is vandalized by a junkie or when its owner accidentally backs into a brick wall, but not if the owner intentionally walks to the vehicle and slashes its tires with a switchblade).
Both forms of insurance are in fact forms of gambling; the policy holder is betting s/he will suffer enough losses covered by the insurance policy to offset the costs of the policy itself. This is, in many cases, a losing bet. Liability insurance becomes immediately more expensive if it ever pays, because only the "guilty party"'s policy pays. In no-fault states, everyone pays more because nobody can be found to be "at fault". This rate grows every time the insured driver causes (or is the most prominent catalyst of) an accident. In no-fault states, everyone's rates gradually climb over time.
While the above rate increases might seem fair, what makes liability insurance pure evil is that it is automatically (and intentionally) doubled or tripled when the driver is under 25 years old, is male, is unmarried, is a bad student, or some combination of the above (look for tripling in these cases).
Proof that insurance companies discriminate based on age is apparent, and admitted by insurance companies themselves because such discimination is not illegal: "your rates are higher because you are under 25." Proof that insurance companies discriminate based upon sex is also readily apparent, although they won't outright admit such discimination because it is illegal: "your rates are higher because you are male, and statistically male drivers produce more claims than female ones."
The true proof of the pure evil nature of liability insurance comes from this paradox: my wife, who was 18 years old when we were married, immediately qualified for State Farm's "married female over 25 years old" rate, the company's absolute lowest rate category (excluding discounts for good driving, good grades, etc.), even though she is still not 25 years old, even today.
Comprehensive insurance sounds like a great deal, until you factor in the deductible, which you must pay in full before the insurance company pays a dime. For most people who cannot afford a deductible lower than $500 (a common value), this means not being provided any assistance whatsoever by their insurance companies until they incur a loss of over $500. Of course, if you cannot reasonably afford a deductable lower than $500, you are likely not in a position to be able to conjure up $500 at any given moment to begin with.
I have paid approximately $24,000 in insurance premiums since my 16th birthday, and my insurance provider has paid a total of approximately $4,500 in that time. This is a net difference of $19,500. Compulsory insurance (liability) comprises roughly half of this amount, and has never paid in my case because I have never caused an accident. By now, even an accident that results in the complete destruction of my vehicle would only roughly cause me to break even; had I been able to put away that insurance premium money into a savings account or money market instead of lining State Farm's pockets, I could have afforded to completely replace my vehicle out-of-pocket now.
My grades were excellent in high school and college, my driving record is clean (no tickets, no accidents caused by self, etc.), and my only "crime" is being male and under 25. Being married instantly gave my wife nearly a 50% discount on her insurance premiums; it gave me nothing.
Furthering the evil nature of car insurance is the fact that it is compulsory in most states, and that there are so many laws in place to protect insurance companies at the expense of their customers. There are near infinite ways for an insurance company to avoid paying what it should otherwise be legally bound to pay. People who commit insurance fraud (acting with the intention of defrauding an insurance company) face stiff penalties, usually far in excess of the actual damages incurred. Insurance companies simultaneously complain about regulations stifling their profits while reminding their captive markets that they need insurance at ever-increasing prices.
I submit these as evidence that car insurance is pure evil.