To its credit, the Smart Car is designed to route crash energy _around_ the passenger compartment, and presumably one reason fender-benders cost so much to repair is that the car is designed to disperse that energy by blowing the whole frame to pieces. Somewhere there’s a high-speed video of such a head-on crash test, and it’s just amazing watching the entire frame disintegrate (from one end to the other) while the passenger area is untouched.
Contrast this with, say, a motorcycle where the “crumple zone” IS the passenger.
Only if some jerk in a cage hits you from behind (where the passengers ride).
I agree with the comments you and others have made about the reason for this high expense is to “save the passenger compartment”.
I think the MOST IMPORTANT point to take away from this article from the Insurance Companies is to EXPECT VERY HIGH insurance rates for these clown cars. Those high rates will easily sop up much if not ALL of the savings that you will achieve from gas savings. The rates may not yet reflect these tests, but count on it: they will VERY soon.