Right - but you are not considering that it's possible for a police department to be so bad as to be uninsurable. Even if the police continue to do misconduct, bad departments would get into situations where no insurer will cover them, and they are forced to make changes. It's not a perfect fix at all, but it would be a nice end-around for qualified immunity.

Just make them pay for the insurance out of the pension fund. Better yet, make individual officers personally liable for acts outside of their official duties such as civil rights violations and crimes. After the first few cops lose all of their money in court the rest of them will start actually policing themselves.