You should impute an income her based upon 40 hours/week @ min wage (that's generally what the court would do).
Are the kids truly with you more than 50% of the time? If that's the case, is there any reason why you wouldn't go for primary placement or at least a 50-50 timeshare?
With regards to the car insurance...well, again you're not obliged to pay. But on that one...think of the kids. I wouldn't want them being transported by an uninsured driver.

