Sindh makes third-party motor insurance mandatory for vehicle registration and transfer

KARACHI: Governor of Sindh Muhammad Kamran Khan Tessori on Wednesday approved the Provincial Motor Vehicles (Amendment) Bill, 2026, making third-party motor insurance mandatory in the province.

Following the governor’s approval, the bill has come into force with immediate effect, a spokesperson for the Governor’s House said.

Under the new law, vehicles cannot be registered or ownership transferred without valid third-party insurance.

The legislation sets minimum compensation for fatalities in road accidents at Rs700,000, while permanent disabilities will be compensated up to Rs500,000.

Insurance companies will also be required to settle claims within 45 days of an accident.

The initiative aims to ensure fair compensation for third parties affected by road accidents and provide comprehensive insurance coverage for drivers of both private and commercial vehicles across Sindh.

Earlier, Sindh’s Excise, Taxation and Narcotics Control Department implemented the Provincial Motor Vehicles (Amendment) Act, 2024, introducing CNIC-linked vehicle number plates across the province. Under this system, vehicle owners retain ownership of their registration marks linked to their CNIC, allowing them to transfer the number plate to another vehicle when selling the original one.

The amendment also abolished the previous categories of commercial and private vehicles and introduced two new classifications: motorcycles and rickshaws, and all types of four-wheel vehicles. No additional fee will be charged for obtaining a CNIC-based number plate, while the fee for Ajrak-themed plates will now be treated as a transfer fee.

The Act defines a registration mark as a personalised registration mark, number plate, or any other identifying document assigned to a vehicle owner containing alphanumeric characters allotted by the registering authority. Vehicle Identification Numbers (VIN) will continue to be based on the chassis number of each vehicle.