Reforms introduced by the Securities and Exchange Commission of Pakistan (SECP) to enforce mandatory third-party motor insurance have increased active insurance coverage in Sindh by 1,374%, with the number of policies rising from 11,200 in March 2026 to 165,064 by the end of June, significantly expanding financial protection for road users.
The surge followed amendments to the Sindh Motor Vehicles Act, 2026, introduced by the Sindh government with the support of the SECP. Under the revised law, every registered vehicle in the province must have valid third-party motor insurance. Vehicles without insurance are no longer eligible for registration, ownership transfer, or annual token tax payment, a move aimed at strengthening compliance and consumer protection.
Third-party motor insurance is a low-cost policy designed to provide financial compensation to victims of road accidents by covering property damage, bodily injury, or death caused to third parties. The amended law also provides for no-fault compensation of Rs. 700,000 in the event of death and Rs. 500,000 for permanent disability, enabling victims and their families to receive timely financial assistance without lengthy legal proceedings.
The reform is intended to address Pakistan’s road safety challenges. According to data from the National Transport Research Centre (NTRC) and the National Police Bureau (NPB), the country records approximately 9,000 to 10,000 reported road traffic accidents annually, leaving thousands injured and placing a significant financial burden on affected families. Mandatory third-party insurance is intended to ensure that accident victims receive compensation instead of bearing the costs themselves.
Sindh has nearly 2.6 million registered vehicles, indicating substantial scope for further expansion of insurance coverage. The sharp rise in policy issuance marks a significant step toward improving road safety, enhancing consumer protection, and increasing insurance penetration across Pakistan.
Following the implementation of the reforms in Sindh, the SECP is working with the governments of Punjab and other provinces to introduce similar measures aimed at expanding mandatory third-party motor insurance nationwide.