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Side scoops like that are common these days, just not as big as that.
For the same reason as protruding A pillars; to prevent air flows around a short radiused corner. Instead it helps building up a stagnant high pressure area that makes the air flow over the car rather than aside.
The scoop vents into the wheel well and reduces turbulence (the Ioniq has it for that reason).
Here they vent out air from the back of the wheel well as well. The first gen Insight has rounded edges at the back of the wheel well, apparently that helps easing out the turbulent ait from the wheel well better than a sharp edge. This rear scoop should guide the air even more.
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2011 Honda Insight + HID, LEDs, tiny PV panel, extra brake pad return springs, neutral wheel alignment, 44/42 PSI (air), PHEV light (inop), tightened wheel nut.
  lifetime FE over 0.2 Gmeter or 0.13 Mmile.
For confirmation go to people just like you.
For education go to people unlike yourself.
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