ISLAMABAD – In a major policy shift aimed at strengthening road safety and financial protection for accident victims, the Sindh government has amended the provincial motor vehicle law to make third-party vehicle insurance mandatory for all registered vehicles.
According to the reports, the move introduces a stricter regulatory framework that could significantly impact vehicle owners across the province.
Under the Motor Vehicles (Amendment) Act 2026, authorities have inserted a new section requiring every vehicle to carry valid third-party liability insurance before it can be registered, transferred, or issued an annual token tax.
This development makes Sindh the first province in Pakistan to enforce mandatory third-party motor insurance through a strengthened legal framework.
What Is Third-Party Vehicle Insurance?
Third-party motor insurance is a policy designed to cover financial liabilities arising from a road accident that causes harm to another person or their property. It does not cover damage to the driver’s own vehicle but protects accident victims from bearing financial losses.
The key objective is to ensure that victims receive compensation without lengthy legal disputes.
Key Highlights of the New Law
- Mandatory insurance requirement for all vehicles registered in Sindh.
- No vehicle registration, transfer, or token tax payment without a valid insurance policy.
- A compensation framework was introduced for accident victims.
- Insurance verification is digitised through a central Motor Insurance Repository (MIR).
Compensation for Road Accident Victims
The amended law also sets defined compensation limits on a no-fault basis, meaning victims can receive financial relief even without lengthy court proceedings.
- Rs700,000 compensation in case of death
- Rs500,000 compensation for permanent disability
These payments will be made by the insurance company associated with the insured vehicle.
Why This Change Matters
Pakistan experiences a large number of road accidents every year, often leaving victims or families struggling with medical and financial burdens. Mandatory third-party insurance aims to ensure that financial responsibility is shared and victims are compensated quickly.
The government is also working with regulators and insurers to improve compliance through digital verification systems and coordinated enforcement.
Key Takeaway
The Sindh government’s new law marks a major step toward modernising Pakistan’s vehicle insurance framework and improving protection for road users. While it introduces an additional compliance requirement for vehicle owners, the policy is designed to create a safer and financially accountable road ecosystem.
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