Sindh Approves Mandatory Third-Party Motor Insurance as provincial authorities introduced amendments to the Sindh Motor Vehicles Act, aiming to provide financial protection to victims of road accidents and strengthen vehicle compliance regulations across the province.
The decision makes third-party insurance a compulsory requirement for vehicle registration and several other administrative processes involving motor vehicles.
Insurance Now Linked to Vehicle Registration
Under the newly approved amendments, third-party motor insurance has been formally integrated into the vehicle registration framework in Sindh.
According to the revised rules, no vehicle will be registered without valid third-party insurance coverage. The same requirement will also apply to vehicle ownership transfers and the payment of annual token tax.
Officials say the measure is designed to ensure that vehicles operating on public roads have basic financial protection mechanisms in place in case of accidents involving other road users.
Compensation for Accident Victims
The updated system introduces defined compensation limits for victims affected by traffic accidents involving insured vehicles.
Under the policy framework:
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In the case of fatal accidents, the affected family may receive compensation of up to Rs700,000 through the insurance system.
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If an accident results in permanent disability, the injured individual may be eligible for compensation of up to Rs500,000.
Authorities believe the insurance requirement will help provide immediate financial relief to victims or their families without lengthy legal disputes.
SECP Supports Implementation
The Securities and Exchange Commission of Pakistan (SECP) has supported the initiative and stated that efforts have been ongoing to integrate third-party motor insurance into vehicle regulatory systems.
According to the SECP, an online verification database has already been developed to confirm the authenticity of third-party insurance policies issued for vehicles.
This digital system is expected to assist authorities in monitoring compliance and preventing fraudulent or invalid insurance documentation.
Expansion of Insurance Compliance Across Provinces
Regulators indicated that similar efforts are being explored in other provinces to strengthen insurance coverage in the transport sector.
The SECP noted that discussions are underway in Punjab to link vehicle route permits with the insurance verification system. Such integration would help improve enforcement of mandatory insurance requirements nationwide.
Experts believe wider adoption of compulsory motor insurance could significantly reduce financial burdens on accident victims while encouraging responsible driving practices.
Road Safety and Financial Protection Goals
Pakistan experiences thousands of traffic accidents annually, often leaving victims and their families facing significant medical expenses or financial hardship.
By making third-party insurance mandatory, policymakers aim to create a safety net that ensures accident victims receive compensation even if the responsible driver cannot personally cover damages.
Officials say the policy represents a step toward improving road safety regulations, strengthening insurance penetration, and building a more structured vehicle compliance system.