Sindh raises road accident compensation to Rs700,000

The Sindh government has increased compensation for road accident victims to Rs700,000 in case of death and Rs500,000 for permanent disability under its mandatory third-party motor insurance regime, with insurance coverage soaring by 1,374 per cent within three months of the law's enforcement, according to the Securities and Exchange Commission of Pakistan (SECP).

It said active third-party motor insurance policies in the province rose from 11,200 to 165,064 by the end of June, following the enforcement of the Provincial Motor Vehicles (Amendment) Act, 2026, in March.

Under the amended law, third-party insurance has become compulsory for all registered vehicles and is now required for vehicle registration, transfer of ownership and payment of annual token tax. The SECP said it provided technical support to facilitate the implementation of the new system.

The insurance offers protection against third-party bodily injury, permanent disability and death resulting from road accidents. The legislation also introduces a no-fault compensation mechanism under which victims or their families can receive financial assistance without the need to establish liability.

Under the scheme, compensation of up to Rs700,000 is payable in cases of death, while victims suffering permanent disability are entitled to up to Rs500,000.