Sindh approves ‘No-Fault Compensation System’ for road accident victims

Sindh Chief Minister Syed Murad Ali Shah has made third-party motor insurance mandatory for all vehicles in the province, describing the move as a major step toward protecting road accident victims and strengthening road safety.

“Under the new policy, no vehicle in Sindh will be registered, and no token tax will be accepted unless it has a valid third-party insurance policy. The decision follows amendments to the Sindh Motor Vehicles Ordinance, under which a new provision - Section - has been added to make insurance coverage compulsory,” read a statement issued by the Sindh CM House on Sunday.

Announcing the initiative, the chief minister said that his government had also approved a “No-Fault Compensation System”, under which victims of road accidents or their families would receive financial assistance regardless of who caused the accident.

According to the new framework, the heirs of a person who dies in a road accident will receive Rs700,000, while individuals suffering permanent disability will be entitled to Rs500,000 in compensation.

Murad said the initiative aimed to provide financial protection to families affected by road accidents. “Providing financial security to victims of road accidents is our priority. This law will ensure that affected families are not left alone in difficult times,” he said.

The chief minister added that Sindh had also launched Pakistan’s first digital insurance monitoring system to ensure transparency and effective enforcement of the law. He directed the Sindh Excise, Taxation and Narcotics Control Department to ensure strict implementation of the new law.

Provincial Excise Minister Mukesh Kumar Chawla said that under the new regulations, vehicles without valid insurance would neither be registered nor allowed to pay token tax.

Secretary Excise Saleem Rajput said the Excise Department had established digital verification of insurance policies through a linkage with the database of the Securities and Exchange Commission of Pakistan to prevent fake or invalid insurance documents.

The new policy also requires a valid insurance policy for the transfer of vehicle ownership, ensuring that every registered vehicle on the road carries proper third-party coverage.

Murad termed the initiative an important milestone for road safety and consumer protection. He said the law would particularly benefit low-income families who often suffer the most in road accidents due to a lack of financial protection. “The system has been designed to ensure transparency so that the possibility of fake insurance is eliminated,” the chief minister said.

He also directed the Excise Department to launch a public awareness campaign so that citizens could fully understand the benefits of the new law.

The chief minister appreciated the efforts of Chawla and his team for completing the complex legislative and administrative work required to implement the insurance framework.

Murad said the Sindh government, in coordination with federal authorities and the Securities and Exchange Commission of Pakistan, had introduced a modern system aimed at protecting citizens and ensuring that victims of road accidents receive timely financial relief.

“Along with tax collection, our real objective is to provide services to the public, which is why insurance has been linked with vehicle registration,” the CM said.