So the system worked exactly as intended?

It's not just auto insurance. Every government, government adjacent and highly regulated process is just like that.

It's not about right and wrong or fairness or making the responsible party pay or saving the children or protecting the environment or preventing sub-prime loans or enforcing building code or or whatever the alleged pretext is. It's about having an efficient process turn the subjective into the quantifiable and/or assign financial responsibility and do so in a manner that's not flagrantly wrong so often that a "large enough to be a problem" amount of people seek recourse outside the system (like smoking the CEO on the sidewalk or armoring a bulldozer or whatever).

But of course, marketing the system as though it's about right and wrong or fairness or whatever is what they do as a means toward what the point actually is so it's easy to understand why you think it failed instead of worked perfectly.