The concept is great but the actual implementation would be hard as it depends on the insurance company if they will adopt the DAO system or not. There are benefits of being transparent as it will hasten the long process in the insurance industry. If one big company will showcase the use of blockchain tech and show how they are doing and performing, it may be a very good example so these insurance companies will follow thru. There are already several insurance companies that are integrating blockchain tech in some of their operations. But no known big insurance company is known to have fully integrated blockchain tech up until now. I like blockchain tech owed to its transparency nature, because the adjusters or third party experts are prone to human bias.
You don't necessarily need the established insurers to adopt this model though.
There are plenty of high tech disruptors like Insurance and Nexus Mutual that are already doing this, providing insurance on DeFi applications for example.
So many possibilities, but it obviously depends on how much you trust a decentralized organisation to pay you out when everything is going south.