Sindh motor insurance coverage jumps nearly 15-fold

June 30, 2026(MLN): The Securities and Exchange Commission of Pakistan (SECP) has reported a sharp increase in third-party motor insurance coverage in Sindh following the implementation of mandatory insurance requirements, with active policies surging by 1,374% over the past three months.

According to the SECP, the number of active third-party motor insurance policies in the province climbed from just 11,200 in March 2026 to 165,064 by the end of June 2026, according to the press release.

The regulator attributed the significant rise to recent legal reforms introduced by the Sindh Government with the support of the Commission.

The mandatory insurance requirement was introduced through amendments to the Sindh Motor Vehicles Act, 2026, making third-party motor insurance compulsory for all registered vehicles in the province.

Under the revised framework, vehicle owners are required to maintain valid third-party insurance to register or transfer their vehicles and to pay annual token tax, reinforcing compliance with the new law.

Third-party motor insurance provides financial protection to victims of road accidents by covering liabilities arising from property damage, bodily injury, or loss of life caused to third parties.

The amended law also establishes a no-fault compensation mechanism, under which the families of deceased victims are entitled to receive Rs700,000, while individuals suffering permanent disability can claim Rs500,000, enabling quicker financial assistance without lengthy legal proceedings.

The SECP said the reforms are aimed at addressing Pakistan's high incidence of road traffic accidents and reducing the financial hardship faced by accident victims.

Citing data from the National Transport Research Centre (NTRC) and the National Police Bureau (NPB), the Commission noted that approximately 9,000 to 10,000 road traffic accidents are reported annually across the country, resulting in thousands of injuries and fatalities each year.

With nearly 2.6m registered vehicles in Sindh, the regulator believes there remains considerable scope to further expand insurance coverage.

The Commission added that wider adoption of mandatory third-party insurance is expected to improve consumer protection, strengthen road safety, and deepen insurance penetration in the country.

Following the successful rollout in Sindh, the SECP said it is collaborating with the governments of Punjab and other provinces to implement similar legislative reforms and extend mandatory third-party motor insurance nationwide.

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