This is because insurance does not actually solve the free rider problem… which has actually been met with much vehemence by many of the mises.org forum members.
I made a thread about it here. Free Riding and National Defense - some problems and possible solutions
I’ll summarize the solutions to the free rider problem in increasing complexity and “robustness”.
- Charity - Its been pointed out that empirically, national defense is a pretty cheap good to provide. Maybe $20bn for all of these united states. At less than 100 dollars per american, this is pretty reasonable.
- Dominant assurance contracts - “I only pay if everyone else pays”. Obviously unworkable with 300 million people, but very possibly workable if those people are represented at the local level, say, through employers or real estate owners! It all comes down to if you think 1000 people can get together and agree on something. Or maybe it only has to be 900. The chances are better because these representatives are entrepreneurs, so they are presumabely smarter than the average person.
- Probabilistic contract - People don’t want to free ride. They want to free ride GIVEN that the service is provided. If you have taken a probability course a light-bulb just went off in your head. So given that the good is provided, there is a certain probability that they will be able to free ride off this. Simply offer them a contract that binds them to this probability. See my thread for more detail.
I don’t think its good to focus on the time dimension. The contracts can simply be made really long term (think about buying a house, you have a very long term contract with the neighborhood association or real estate developer).
[edit] Sorry, I’m having some weird formatting bug. Had to ghetto format post.