Sindh enforces mandatory motor insurance, raises road accident compensation to Rs700,000

The implementation of mandatory motor third-party insurance in Sindh has increased compensation for road accident victims from Rs20,000 to Rs700,000. Under the new framework, accident victims will receive compensation promptly through an automated system without the need for court proceedings. The initiative has also driven a record 1,300% increase in commercial vehicle insurance policies, with the total number of vehicle insurance policies rising from 11,000 to more than 165,000. Authorities are now preparing to extend the mandatory motor insurance regime to Punjab, Khyber Pakhtunkhwa and Balochistan. READ MORE: Sindh govt amends motor vehicles law: Third-party insurance made mandatory Moreover, in related reforms, life insurance annuity products have been introduced for retired individuals, while a consortium of insurance companies has been established to expand crop insurance coverage. The country’s Takaful sector has also grown to account for 14% of the insurance market, alongside the issuance of new regulatory guidelines aimed at strengthening the industry’s development. 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.