Third-Party Motor Insurance Coverage in Sindh Skyrockets
Third-party motor insurance coverage in Sindh has surged 1,374% within three months of the provincial government making it mandatory for all registered vehicles, according to the Securities and Exchange Commission of Pakistan (SECP). Following the enactment of the Provincial Motor Vehicles (Amendment) Act, 2026, in March, active third-party policies in Sindh increased from 11,200 to 165,064 by the end of June 2026.
Mandatory Requirement for Vehicle Registration and Transfer
Under the new system, third-party motor insurance is now compulsory for all registered vehicles. Authorities now require this coverage for vehicle registration, ownership transfer, and annual token tax payments. SECP provided full support to implement the system smoothly.
Coverage and Compensation Details
Third-party motor insurance offers essential, low-cost protection. It covers bodily injury, permanent disability, or death to third parties in road accidents. The new law also establishes a no-fault compensation system. Victims or their families receive prompt financial aid without determining fault. Compensation of up to Rs700,000 will be paid in case of death, and up to Rs500,000 in case of permanent disability. This system eliminates lengthy court proceedings and provides immediate support.
Impact on Road Accident Victims
According to the National Transport Research Centre and the National Police Bureau, approximately 9,000 to 10,000 traffic accidents occur annually in Pakistan, resulting in thousands of injuries and imposing significant financial burdens on affected families. Mandatory third-party insurance ensures innocent victims and their dependents have access to timely compensation and medical expense support.
Future Expansion to Other Provinces
With approximately 2.6 million registered vehicles in Sindh, all are expected to gradually come under coverage, improving financial protection for accident victims while promoting the insurance industry, and building public trust in insurance products. SECP officials stated that following the success of this model in Sindh, the SECP is also working with Punjab and other provincial governments on similar reforms to expand third-party motor insurance coverage across Pakistan and enhance consumer protection everywhere.
Modernising Pakistan's Insurance Sector
This initiative marks a significant step toward modernising Pakistan's insurance sector. It aligns with broader goals to improve financial inclusion and safeguard citizens from the economic fallout of road accidents. Experts believe sustained enforcement and public awareness will further boost compliance and benefits for all road users.
