Wow, sounds like someone has had a bad experience with their insurance. Switch companies, or take out an additional rider on your policy to cover the equity you have in the vehicle. Simple as that.
Also, you're proposing an insurance fraud scam, which is highly illegal and a really, really stupid idea.
I haven't found an honest or fair regular insurance company for a regular coverage policy on a car older than ten years. I have been with three of the largest insurance companies in the US (State Farm, Miller's, and Liberty Mutual) and ended each customer relationship with them trying to total out a car over the cost of replacing and and painting a plastic bumper cover.
I have yet to successfully receive a quote for a collectible car policy for a 10+ year old Japanese car.
Hagerty flatly refused to consider any Japanese made car for antique, classic, or collectible insurance.
It took five years to get Grundy to the point that they would even admit that a right hand drive, race edition, limited production, Japanese car, "might" qualify for collector insurance.
I have been badgering AAA for over 2 1/2 years to even issue a quote on the same vehicle and a 40+ year old RHD car.
State Farm now says they offer antique policies, but the car may have to have antique plates to qualify. And I already left them as an unhappy customer once.
The rest can not get past the fact that the VIN is not 17 digits long and their computer system will not go past that step to calculate a quote. The standard response is "We will cover your regular US market beater car, but not the RHD cars, and the show cars will be Blue Book value only".
And you are ignoring that auto insurance itself is
a scam. If it weren't a scam, we would not hear from so many unhappy people who are asking how they can convince their insurance company that their car is worth more than the lint in their pocket, when their insurance company wants to total it out.
There is no law that specifies what a pain and suffering settlement should be used for. Our state law sets the amount at 1 1/2 times the amount of the medical bills, regardless of the actual amount of pain and suffering incurred. And our state has a booming industry of doctors who are anxious to treat people after they are involved in an auto accident.
The law provided for the insurance company to take money from the automobile owner, and the law provided for the automobile owner to collect only for medical and pain and suffering. Nothing more illegal or more morally wrong than what the insurance company is doing, which is charging money for a policy that they never intend to pay on.