The Government of Sindh has introduced a major legal reform by making third-party motor vehicle insurance mandatory for all vehicles registered in the province. The measure has been implemented through amendments to the Motor Vehicles (Amendment) Act, 2026, aimed at improving financial protection for victims of road accidents.
The reform has been introduced with support from the Securities and Exchange Commission of Pakistan (SECP), which has been working with provincial governments to strengthen the legal framework and ensure effective enforcement of mandatory motor insurance across the country.
New Legal Requirement for Vehicle Registration
Under the amendment to the Provincial Motor Vehicles Ordinance, 1965, a new Section 67-H has been inserted. According to the revised law, no vehicle will be registered, transferred, or allowed to pay annual token tax without a valid third-party insurance policy.
This means vehicle owners must obtain insurance coverage that protects against liabilities arising from accidents involving other people, property, or vehicles.
Compensation for Accident Victims
Third-party motor insurance is considered a basic and affordable policy that covers legal liabilities resulting from road accidents. The new law also introduces defined compensation limits on a no-fault basis, ensuring quick financial assistance for victims.
Under the revised framework:
• Rs700,000 compensation will be provided in case of death.
• Rs500,000 compensation will be available for permanent disability.
These provisions are designed to ensure timely financial relief for accident victims or their legal heirs.
Sindh Becomes First Province to Enforce Policy
With this amendment, Sindh has become the first province in Pakistan to implement a strengthened legal framework making third-party motor insurance compulsory.
To support enforcement and transparency, the Securities and Exchange Commission of Pakistan has also operationalized the Motor Insurance Repository (MIR), a centralized digital database that records motor insurance policies issued by registered insurers. The system allows authorities to digitally verify insurance coverage at the time of vehicle registration.
Expansion to Other Provinces
The SECP is also collaborating with the Punjab Provincial Transport Authority to integrate the vehicle route permit system with the Motor Insurance Repository for online verification of insurance policies.
Officials hope that the successful implementation in Sindh will encourage other provinces to adopt similar measures to strengthen road safety, consumer protection, and financial security for accident victims across Pakistan.