Sindh mandates third-party vehicle insurance, sets death compensation at PKR 700,000

Road accident victims in Sindh will now be entitled to compensation of up to PKR 700,000 in case of death and PKR 500,000 for permanent disability, after the provincial government amended the law to make third-party liability insurance mandatory for all registered vehicles.

The compensation is to be paid on a no-fault basis, meaning victims or their legal heirs will not be required to establish negligence to claim relief — a provision that legal experts say could significantly speed up payouts to affected families.

The amendment, introduced through a new Section 67-H to the Provincial Motor Vehicles Ordinance, 1965, bars any vehicle from being registered, transferred, or allowed to pay annual token tax without a valid third-party insurance policy.

The move makes Sindh the first province in Pakistan to enforce such a requirement through a formal legal framework.

The Securities and Exchange Commission of Pakistan (SECP), which has been engaging with provincial governments to strengthen motor insurance laws, welcomed the development.

Third-party motor insurance covers legal liabilities arising from property damage, injuries, or deaths caused to others in an accident, and is generally considered one of the more affordable insurance products available to vehicle owners.

To support enforcement, the SECP has operationalized the Motor Insurance Repository (MIR), a centralized electronic database that records policies issued by registered insurers and enables digital verification at the time of vehicle registration.

The commission is also working with the Punjab Provincial Transport Authority to connect the vehicle route permit system to the MIR, allowing online validation of insurance policies for commercial vehicles across the province.

The SECP expressed hope that other provinces would follow Sindh's lead in adopting similar consumer protection and road safety measures.