Why are Insurance companies government owned bodied?

Answer 1

In America they're not government owned. Government regulated yes but not owned.

The Government does have insurance programs (or rather programs which essentially function as an insurance company) for it's various member departments (like the military which basically has it's own medical insurance for servicemembers and they're families).

Mostly the government has privitized it's actuall insurance companies (like GEICO which stands for Government Employees Insurance Company which is a great example since it used to be the fed and is now pretty much for anyone and everyone).

Answer 2

There are several government run insurance bodies and programs in the U.S.
The national flood insurance program run by FEMA provides flood insurance. You can typically purchase this along with your homeowners insurance and it would seem like you have it as part of your insurance, but it is more than likely written by FEMA. http://www.fema.gov/business/nfip/.
Florida has something in place to purchase wind insurance from (still very expensive, but a little better than standard market).
Workers Compensation funds are directly administered by several states. Employers purchase their workers compensation insurance through these states directly instead of going to an insurance company.
Various "Risk Pools" around the country as well. These pools of money are administered by states for specific types of losses (hurricane, fire, draught) that are very difficult to find standard coverage for. If an insurance company wants to write standard business in these areas, they are typically required to kick in a percentage of premium from the standard business to support the really risky stuff.

In all, it is probably best to keep the government out of standard lines of insurance. When they enter these markets, things get too political and the taxpayers usually end up taking it in the shorts when the government regulators got the rates wrong and loose a bunch of money.

If you want to get some more information on what happens when the government gets too involved, look to Canada. Here is a link to a list of "Myths" about government run insurance.

Hope this helps.

Answer 3

In the US, most insurance companies are privately owned.

Some insurance is run by government insurance companies - Social Security is one, which is too big for any one insurance company. Unemployment insurance is another - private industry would not want the possibility of mass unemployment.