You don't think other people are impacted when families lose their homes and everything they have? Who do you think is going to end up having to pay to house and feed them? Taxpayers. The economic effects on people who still have their house aren't immediate and obvious so it's easy to pretend that nobody else is impacted, but it's almost never the case, especially when it's not about one guy whose house burned down after he tried to save a little extra money by not insuring against fire, but entire communities who lose everything.
When government manages insurance and everyone is covered the costs are dramatically lower and everyone is safer. The role of government should be to provide important safety nets to people providing stability and confidence to communities and the economy. Government can do it without needing to continuously stuff their pockets with higher and higher profits like shareholders demand, and without doing everything possible to avoid paying out valid claims the way private insurance companies do in order to protect those profits.
While there does come a point where it doesn't make sense for people to continue to live in certain areas, for more typical cases it'd be a major improvement that would save more money than letting people who just want to gamble on the odds get away with not paying for insurance at all. Eventually many of those people lose that game and instead of just upsetting their lives it destroys them while everyone around them pays the higher costs.
All of those things could help people be more successful, make them less likely to lose their job or have a better relationship, etc.
At some point, there’s a line where government should protect third parties and a different line where government protects first parties from themselves. Different people will prefer those lines be located in different places; I tend towards giving individuals power over governments.
I'd also say that in many cases the best thing you can do to empower individuals is to give preference to government over corporations. Government is (or at least can be made to be) accountable to the people. You don't have the power to elect the CEO of a company or vote for their corporate policy. Voting with wallets is largely a myth. If that actually worked there wouldn't be massive numbers of companies constantly screwing people over. Some companies are even basically universally hated yet remain highly successful. Government is where individuals hold the most power, especially at local levels. Care has to be taken to not let fear of government power back you into a position where you're being taken advantage of by others looking to force you into paying for their negative externalities.
I think auto liability insurance (or an equivalent bond posting) should be mandatory, because it protects others. I don’t think theft or collision insurance should be mandatory (and in fact don’t carry it on some of our cars).
Insure against losses that you couldn’t withstand. Don’t (or self-) insure against those that you can easily withstand. No government intervention needed there IMO.