Car insurance protects you from financial losses resulting from an accident, whether with another car or against an object, theft of the vehicle or part of it, water or fire damage, and so on. Having comprehensive car insurance protects you from any liability caused by an accident involving a third party, person, or property. It also covers all natural disasters. The Motor Vehicles Act of 1988, a third party insurance cover is mandatory for anyone who owns or drives motor vehicle in India.