If you have a car, chances are you have car insurance for it. But how much do you understand about what kind of policy you have and what policy is best for you, given the risks that you want to protect against? Here we share with you basics that you must know if you want to make smart decisions about your car insurance policy. Why do you need car insurance? You need car insurance because its mandatory — its the law. For any vehicle to drive on Indian roads, it must have a valid insurance policy, that at a minimum covers the cost of damage that you might cause to other people or vehicles. Rather than have to pay from your own pocket, if you have a valid car insurance policy, the insurer will assume the liability, as long as the damage is covered under the terms of the insurance contract and there is no case of fraud. Situations where a car insurance policy can cover costs are damages arising from an accident, theft, fire and any natural calamities like flood, earthquake, or cyclone. ...