In any case, severe problems arise long before you get to that stage. As soon as I find out that my neighbors have purchased invasion insurance or militia coverage or what-the-hell-have-you, the obvious rational choice for me is to stop paying for my own military defense. After all, the people protecting my neighborhood from attack can hardly leave my house selectively undefended, in which case, I get the best of both worlds - I get protection, but I don't have to pay for it. It's the classic free-rider problem, of course, and as soon as my neighbors figure out how my impeccable logic works, the whole thing falls apart tout suite.
The free-rider problem is very real. It isn't as insurmountable as public-choicers like to claim, however. Yes, the free-rider is behind the front, if his paying neighbors are. However, when the neighbors travel, they are entitled to intelligence updates on safe routes, and an escort for "important" trips (as defind by contract), which the free-rider is not. The free-rider isn't allowed into bomb shelters when there's shelling, and he isn't allowed in evacuation vehicles if the battle is going badly. His homeowners' insurance will be sky-high, because he doesn't get the "defense-agency discount". Etc., etc...