Sindh makes third-party motor insurance compulsory for all vehicles

The Government of Sindh has introduced changes to the Motor Vehicles (Amendment) Act, 2026. Under the new law, third-party motor liability insurance is now mandatory for all registered vehicles in the province. This step aims to provide better financial protection for people affected by road accidents.

A new Section 67-H has been added to the Provincial Motor Vehicles Ordinance, 1965. According to this rule, authorities will not register or transfer a vehicle, and they will not accept annual token tax if the vehicle does not have valid third-party insurance.

This insurance policy is basic and affordable. It covers legal responsibilities in case a vehicle causes property damage, injuries, or death in an accident. The amendment also sets clear compensation limits to ensure quick financial help for victims.

Under the policy, the legal heirs of a person who dies in an accident will receive PKR 700,000. In case of permanent disability, the affected person will receive PKR 500,000. With this step, Sindh has become the first province in Pakistan to enforce mandatory third-party motor liability insurance.

To support this system, the Securities and Exchange Commission of Pakistan (SECP) has launched the Motor Insurance Repository (MIR). This is a central digital database that keeps records of all motor insurance policies issued by registered insurance companies.

The system allows authorities to instantly verify insurance policies online during vehicle registration. This helps ensure that all vehicles meet the legal requirements.

The SECP is also planning to expand this system. It is currently working with the Punjab Provincial Transport Authority to connect vehicle route permits with the Motor Insurance Repository. This step will help improve enforcement across the country.

The SECP has praised the Sindh government for introducing this important consumer protection measure and hopes other provinces will take similar steps soon.