KARACHI: The Sindh government has introduced amendments to the Motor Vehicles (Amendment) Act, 2026, making third-party liability insurance mandatory for all vehicles registered in the province, in a move aimed at strengthening financial protection for road accident victims.
The reform follows ongoing engagement by the Securities and Exchange Commission of Pakistan (SECP) with provincial governments to improve enforcement of mandatory motor insurance across the country.
Under the amendment to the Motor Vehicles Ordinance, 1965, a new Section 67-H requires all motor vehicles to carry valid third-party liability insurance. The revised framework states that vehicles without insurance will not be eligible for registration, transfer or payment of annual token tax.
Third-party motor insurance provides coverage for legal liabilities arising from accidents, including damage to property, injuries or death caused to another person. The amendment also introduces defined compensation limits on a no-fault basis to ensure quicker financial relief for victims or their families.
Under the new provisions, compensation of Rs700,000 will be provided in the event of death, while Rs500,000 will be paid in case of permanent disability.
To support implementation, the SECP has operationalised the Motor Insurance Repository, a centralised digital database that records motor insurance policies issued by registered insurers. The system enables online verification of policies and helps ensure compliance at the time of vehicle registration.
The regulator is also working with the Punjab Provincial Transport Authority to link vehicle route permits with the repository for digital validation of insurance policies, as part of broader efforts to strengthen enforcement across the country.
