Your insurance must meet certain legal minimums. As an alternative, you can demonstrate that you have enough financial resources to self-insure. Theft and collision insurance and comprehensive coverage are not required. If you are stopped by a police officer and asked for proof of insurance, you will get a ticket if you can't produce it at that time. However, you can have the ticket nullified by showing proof of insurance in court.
Judges can impound the vehicles of frequent, flagrant violators.
There is no appeal from such a decision. The driver can never get the car back, although the lender that financed the car can. If you provide false evidence of insurance coverage and your driver's license is suspended, the suspension won't be lifted until you demonstrate genuine proof of insurance.