ISLAMABAD: The Securities and Exchange Commission of Pakistan's (SECP) reforms to enforce third party motor insurance have increased third-party motor insurance coverage in Sindh by 1,374%, with active policies rising from 11,200 in March 2026 to 165,064 by the end of June, significantly expanding financial protection for road users.
The Sindh Government, with the active support of the SECP, made third-party motor insurance mandatory through amendments to the Provincial Motor Vehicles Act, 2026.
Under the revised law, every registered vehicle in Sindh must carry valid third-party insurance. Vehicles without insurance cannot be registered, transferred, or pay annual token tax, strengthening compliance and consumer protection.
Third-party motor insurance is a basic and affordable policy that provides financial protection to victims of road accidents by covering damage to property, bodily injury, or death caused to another person.
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The law also introduces no-fault compensation of Rs. 700,000 in case of death and Rs. 500,000 for permanent disability, ensuring timely financial relief to victims and their families without lengthy court proceedings.
The reform addresses a major public safety challenge. According to the National Transport Research Centre (NTRC) and the National Police Bureau (NPB), Pakistan records around 9,000 to 10,000 reported road traffic accidents every year, leaving thousands of people injured and imposing a heavy financial burden on affected families.
Mandatory third-party insurance ensures that innocent victims receive compensation instead of bearing accident-related costs on their own.
Sindh has nearly 2.6 million registered vehicles, indicating substantial potential for further expansion of insurance coverage.
The sharp increase in policy issuance marks an important step towards improving road safety, strengthening consumer protection, and increasing insurance penetration in Pakistan.
Building on Sindh's successful implementation, the SECP is working with the governments of Punjab and other provinces to introduce similar reforms and expand mandatory third-party motor insurance across the country.
