I'd argue most consumer insurance programs depend a lot on interpretation. You don't want to be exposed to Inadvertent Algorthmic Cruelty when you're in a situation where your civil insurance should kick in.
IMO Smart contracts are a good way to model and trade securities, options or futures instead, leaving the underlying assets to be managed by real world humans who can make things happen out of the blockchain.
You'd still be able to rely on human interpreters, who would do all the on-the-ground work the insurance adjuster does. There would be a clearinghouse for those jobs, and contractors would do them.
The incentives could be set up such that the cost of being caught straying from protocol would be higher than the fraud opportunity.
Or you could just reply on network-of-trust. Brand loyalty, etc. Choose Aetna claim investigators! We Follow Protocol
IMO Smart contracts are a good way to model and trade securities, options or futures instead, leaving the underlying assets to be managed by real world humans who can make things happen out of the blockchain.