40% increase in third-party motor insurance policies in Sindh

A significant increase in the number of insurance policies has been recorded in Sindh following the mandate for third-party motor insurance for vehicles. Following an amendment to the Motor Vehicle Act in March of this year, the number of insurance policies rose to 452,515 by November 2026—a sharp increase from just 11,200 in March.

Consequently, the number of policies grew by approximately 3,940 percent—an increase of nearly 40-fold—within just a few months.

Verification of Insurance via a Digital Repository

These legal reforms were introduced by the Government of Sindh in collaboration with the Securities and Exchange Commission of Pakistan (SECP). To facilitate the implementation of mandatory third-party motor insurance, the Central Depository Company established a motor insurance repository, which allows for the digital verification of insurance policies.

This system has also been integrated with the Sindh Excise, Taxation, and Narcotics Control Department (responsible for vehicle registration and taxation) to streamline the process of verifying vehicle insurance.

What Damages Does Third-Party Insurance Cover?

The purpose of third-party motor insurance is to provide financial protection to other individuals affected by road accidents. Under the terms of the policy and the relevant law, this insurance covers liability for injuries, death, or property damage caused to another person in the event of an accident.

However, it does not cover damage to the policyholder's own vehicle. There are approximately 2.6 million registered vehicles in Sindh; therefore, despite the current increase in the number of insurance policies, there remains significant scope to bring more vehicles under this coverage.

SECP Emphasizes Nationwide Implementation of Insurance

SECP Chairman Dr. Kabir Ahmed Sidhu states that third-party motor insurance helps provide essential financial compensation to individuals affected by road accidents and their families.

According to him, building on the progress made in Sindh, consultations are underway with the federal government and other provincial governments—including Punjab—to advance legislative efforts, with the goal of implementing a third-party motor insurance system across all of Pakistan.

The rise in the number of insurance policies is being viewed as a significant development in terms of legal compliance and the protection of road users. To sustain this momentum, public awareness, effective enforcement, and the availability of easily accessible insurance products have been identified as essential requirements.