A historic reform by the Securities and Exchange Commission of Pakistan (SECP) and the Government of Sindh has led to an extraordinary 1,374% increase in third-party motor insurance coverage in just a three-month period. It was officially reported today that this increase occurred following the mandatory implementation of this type of insurance for all registered vehicles, providing substantial financial protection to millions of vehicle owners, road users, and accident victims across the province.
In March 2026, the Provincial Motor Vehicles (Amendment) Act, 2026 mandated third-party motor insurance for all vehicles in Sindh. This legal change increased the number of active insurance policies from 11,200 to 165,064 by the end of June 2026.
The SECP’s collaborative approach has ensured that third-party motor insurance is now a mandatory requirement for vehicle registration, transfer of ownership, or payment of the annual token tax. This measure not only strengthens the enforcement of the law but also enhances consumer protection.
This important insurance policy provides basic and affordable coverage, offering financial relief in the event of bodily harm, permanent disability, or death resulting from road incidents. The introduction of a no-fault compensation system provides financial assistance to victims or their families without the need to establish liability. Compensation can reach up to 700,000 rupees in the event of death and 500,000 rupees for permanent disability, providing immediate aid without lengthy legal battles.
Data from the National Transport Research Centre and the National Police Bureau indicate that there are 9,000 to 10,000 reported traffic accidents annually in Pakistan, causing numerous injuries and a financial burden on affected families. The mandatory insurance policy guarantees immediate compensation and assistance for medical expenses, reducing the economic burden on innocent victims and their families.
With approximately 2.6 million registered vehicles, this initiative ultimately aims to include all vehicles, increasing financial protection for road accident victims and promoting broader insurance awareness and acceptance nationwide.
Following Sindh’s successful model, the SECP is actively engaging with Punjab and other provincial administrations to implement similar reforms with the aim of expanding third-party motor insurance across the country.