Sindh mandates third-party insurance for all vehicles

The Sindh government has amended provincial motor vehicle laws to make third party liability insurance compulsory for all vehicles registered in the province, introducing new compensation protections for road accident victims.

The change has been made through amendments to the Motor Vehicles (Amendment) Act, 2026, which inserts a new Section 67-H into the Provincial Motor Vehicles Ordinance, 1965.

Under the revised framework, vehicles will not be eligible for registration, ownership transfer, or payment of annual token tax unless a valid third party liability insurance policy is in place.

Third party motor insurance covers legal liabilities arising from accidents that cause injury, death, or property damage to another person.

The amendment also establishes compensation limits on a no-fault basis, providing Rs700,000 in case of death and Rs500,000 for permanent disability to victims or their legal heirs.

Officials said the reform is aimed at strengthening financial protection for road users and ensuring accident victims receive timely compensation.

The move follows ongoing engagement by the Securities and Exchange Commission of Pakistan with provincial governments to promote enforcement of mandatory motor third party insurance across the country.

To support implementation and verification, the regulator has operationalised the Motor Insurance Repository, a centralised digital database that records motor insurance policies issued by insurers registered with the commission.

The system allows authorities to digitally verify insurance coverage and ensure compliance with legal requirements during vehicle registration and related processes.

Officials said the measure is intended to strengthen consumer protection and improve enforcement of insurance requirements within the motor vehicle regulatory framework.