Third-Party Insurance: SECP Reforms Drive 1,374% Surge in Sindh Motor Coverage
Mandatory third-party motor insurance boosts active policies from 11,200 to more than 165,000 in Sindh as authorities expand financial protection for road users.
Motor vehicles travel on a road as mandatory third-party insurance coverage expands across Sindh.
ISLAMABAD: Third-Party Insurance coverage in Sindh has increased by 1,374% following regulatory reforms introduced by the Securities and Exchange Commission of Pakistan (SECP), with active motor insurance policies rising from 11,200 in March 2026 to 165,064 by the end of June.
The Sindh government, supported by the SECP, made third-party motor insurance compulsory through amendments to the Provincial Motor Vehicles Act, 2026. Under the revised law, every registered vehicle in the province must have valid third-party insurance. Authorities have also linked insurance compliance to vehicle registration, ownership transfers and annual token tax payments.
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Third-party motor insurance provides financial protection to victims of road accidents by covering property damage, bodily injury or death caused to another person. The amended law also introduces no-fault compensation of Rs700,000 in the event of a death and Rs500,000 for permanent disability, enabling victims and their families to receive financial assistance without prolonged legal proceedings.
The SECP said the reforms address a significant road safety challenge in Pakistan. According to data from the National Transport Research Centre (NTRC) and the National Police Bureau (NPB), the country records between 9,000 and 10,000 reported road traffic accidents each year, leaving thousands of people injured and placing a substantial financial burden on affected families.
Officials said mandatory insurance helps ensure that victims receive compensation instead of bearing accident-related expenses themselves.
Sindh has nearly 2.6 million registered vehicles, indicating significant scope for further expansion of insurance coverage across the province. The SECP said the sharp increase in active policies represents an important step towards improving road safety, strengthening consumer protection and increasing insurance penetration in Pakistan.
Following the implementation in Sindh, the SECP is working with the governments of Punjab and other provinces to introduce similar reforms and expand mandatory third-party motor insurance nationwide.
