You are only required to carry auto insurance to pay for damages that you do to OTHER people / property. This is called having just liability. You are not required to carry full coverage, unless the bank owns your car, then it's really not your car, so again, you're paying in case you damage other persons (the banks) property. Having only liability, you're self-insuring your own vehicle of damages and will pay everything out of pocket to fix your vehicle.
Think of the law requiring you to provide full coverage on your vehicle. You are also not required by law to purchase a vehicle.