Sindh Third-Party Motor Insurance: What Car Owners Must Do Before Token Tax or Transfer

Sindh's third-party motor insurance system has moved from a little-used requirement to a practical checkpoint for many vehicle owners. The Securities and Exchange Commission of Pakistan (SECP) says the number of policies issued in the province rose from 11,200 in March 2026 to 452,515 by November, an increase of about 3,940% in eight months.

That headline matters, but the more useful point for owners is simpler: for vehicles covered by the rule, a valid policy can be required before registration, ownership transfer or annual token-tax payment is processed. This is not comprehensive insurance, and it does not repair your own car after an accident.

The rule in one minute

Question	What Sindh vehicle owners should know
Who is covered?	Cars and other in-scope motor vehicles registered in Sindh.
Are motorcycles covered?	No. Sindh's published law expressly exempts motorcycles and other two-wheelers from the mandatory requirement, although owners may buy cover voluntarily.
When can it be checked?	At registration, ownership transfer and annual token-tax payment for covered vehicles.
What does it protect?	Legal liability for injury, death or property damage caused to another person, subject to the policy and applicable law.
What does it not protect?	Your own vehicle's accident damage, theft or other losses unless you have separate comprehensive cover.

Why policy issuance jumped so sharply

The change is not simply a sudden burst of interest in insurance. Sindh tied compliance to everyday vehicle administration, while the Motor Insurance Repository (MIR) gave authorities a digital way to validate policies against registration and taxation processes.

SECP's latest figure is roughly 40 times the March count. The regulator also says Sindh has nearly 2.6 million registered vehicles, but those two numbers should not be used to declare every vehicle outside the 452,515 policies uninsured or non-compliant. The total fleet includes motorcycles, which are exempt from the mandatory rule, and may include inactive vehicles. SECP has not published a like-for-like count of active vehicles that were legally required to carry cover in November.

The defensible takeaway is that enforcement and digital verification have greatly increased policy issuance, while a precise compliance rate cannot be calculated from the public figures alone.

Cars are in; motorcycles are expressly exempt

Some official and media summaries describe the requirement as applying to "all vehicles" in Sindh. The province's published law is more specific. The Sindh Finance Act 2025 amended the relevant motor-vehicle insurance provisions to exempt motorcycles and all other two-wheeled motor vehicles, with or without gears, from mandatory insurance.

For car and commercial-vehicle owners, the later enforcement framework links valid third-party cover to registration, transfer and annual tax processes. Motorcycle owners can still choose third-party cover voluntarily, but they should not be told that this particular Sindh mandate makes it compulsory.

This provincial distinction is also why owners should avoid treating advice for another jurisdiction as a Sindh procedure. Auto Dost's guide to Islamabad token tax, for example, deals with a different authority and tax structure.

Third-party cover is not insurance for your own car

The phrase "third party" identifies who receives protection. If the insured vehicle causes injury, death or property damage to someone else, the policy can respond to the owner's legal liability within its terms and the law. The first party, meaning the policyholder, does not receive cover for damage to their own vehicle under a third-party-only policy.

SECP's March explanation of the Sindh framework cites no-fault compensation limits of PKR 700,000 for death and PKR 500,000 for permanent disability. Those figures are statutory compensation limits, not a promise that every claim will automatically pay the maximum. The facts of the incident, documents, policy terms and applicable process still matter.

Owners who also want protection against theft, accidental damage to their own car, flood or other insured losses need to compare comprehensive policies. The scope, exclusions, excess, tracker conditions and claim process should be read before payment.

What to do before token tax, registration or transfer

1. Confirm the vehicle class. Check that the vehicle is subject to the requirement. Do not apply the car rule to an exempt two-wheeler.
2. Use an active insurer or authorised general takaful operator. SECP publishes lists of active insurers. Verify the provider instead of buying a cheap certificate from an unverified seller.
3. Match every detail. The registration number, chassis or other vehicle identifier, owner's name and CNIC details should agree with the vehicle record and sale documents.
4. Ask whether the policy has reached the MIR. A PDF or printed certificate is not helpful if the authority cannot digitally validate it. Ask the insurer to confirm submission and allow time for the record to appear before a deadline.
5. Keep proof and claim instructions. Save the policy schedule, receipt, insurer contact details and the steps for reporting an accident. Ask what documents and notification time limits apply.

Used-car buyers should make this check before final payment, not after taking possession. Insurance compliance does not replace the usual checks on ownership, token tax, chassis and engine numbers, accident history and mechanical condition. Auto Dost's new-versus-used car buying guide covers the wider due-diligence picture.

Do not choose a policy on price alone

Auto Dost found no current official province-wide premium table that would justify quoting one price for every vehicle. Premiums and terms can differ by vehicle class, insurer and coverage. A very low quote is not a saving if the provider is not active, the vehicle details are wrong, the policy is not recorded for verification or the exclusions are misunderstood.

Before paying, ask for the full policy wording, compensation limits, exclusions, accident-reporting procedure, required documents and complaint route. If a seller promises comprehensive protection while issuing only a third-party certificate, the two products are being confused.

What the November figure really tells us

The rise to 452,515 policies shows that linking insurance with vehicle administration can change behaviour quickly. It does not prove universal compliance, nor does it tell owners that their own cars are insured against damage.

For a Sindh car owner, the practical move is to verify a genuine third-party policy before beginning registration, transfer or token-tax work. For a motorcycle owner, the published exemption remains important. For both, the policy wording matters more than a certificate's headline.

Sources

• SECP press release: Sindh sees near 40-fold rise in third-party motor insurance policies, 13 November 2026
• Sindh Finance Act 2025, including the motorcycle exemption
• SECP explanation of Sindh's mandatory third-party insurance framework
• SECP Motor Insurance Repository announcement
• SECP insurance-company data and active-insurer lists
• Sindh Excise official notice on mandatory third-party insurance