Crop insurance is a tool which can protect farmers and spread their risks among themselves so that individual pressures would reduce. According to the Indian council of food and agriculture, crop insurance schemes have not been very successful all over the world and in India too it has not shown impressive results. In this paper we will discuss the need for crop insurance in India, status of crop insurance in India, the private participation in crop insurance, issues faced in crop insurance schemes, adverse selection and moral hazard problem in crop insurance, challenges to crop insurance in India, recommendations and way forward for crop insurance in India. Along with small landholdings, the farmers are unaware of the schemes too which deters them to avail crop insurance. Awareness on the specific schemes is crucial. An insurance scheme should be designed which has greater coverage with respect to area, crops and farmers too. A database can be created which stores all the information regarding the land, crop-yield, weather conditions of all areas, which could be accessed by all the stakeholders of crop insurance schemes.