Sindh Mandatory Car Insurance & CNIC-Based Vehicle Registration

The Government of Sindh has approved significant reforms to the province’s vehicle registration and insurance system, making Third-Party Liability Motor Insurance mandatory for all four-wheel vehicles while introducing a CNIC-based vehicle registration model.

The changes, approved through amendments to the Provincial Motor Vehicles Ordinance, 1965 under the Motor Vehicles Amendment Act, aim to modernize vehicle administration, improve road safety, and strengthen insurance compliance across Sindh.

If you own a car in Sindh, here’s everything you need to know about the new regulations, how they affect you, and what actions you’ll need to take.

Mandatory Third-Party Car Insurance Is Now Required in Sindh

One of the biggest changes is the introduction of mandatory Third-Party Liability Motor Insurance for every private and commercial four-wheel vehicle operating in Sindh.

Under the newly inserted Section 67-H of the Provincial Motor Vehicles Ordinance, vehicle owners must maintain an active third-party insurance policy to access essential Excise services.

The Sindh Excise and Taxation Department will electronically verify insurance coverage before processing vehicle-related transactions.

What Happens Without Valid Third-Party Insurance?

If your vehicle does not have an active third-party insurance policy, you will not be able to:

• Pay your annual vehicle token tax.
• Transfer ownership of your vehicle.
• Register a newly purchased vehicle.
• Complete certain vehicle-related services at the Excise Department.

This makes third-party insurance a mandatory legal requirement rather than an optional expense.

Third-Party Insurance Compensation Limits

The new law introduces a no-fault compensation system, allowing victims or their legal heirs to receive financial compensation without lengthy court proceedings.

Compensation Schedule

These statutory compensation limits provide financial protection to road users involved in covered accidents.

Government Reduces Insurance Taxes to Lower Costs

To make mandatory insurance more affordable, the Sindh Government has introduced tax relief measures.

Reduced Stamp Duty

The stamp duty on third-party insurance policies has been reduced from:

• Rs. 500 to Rs. 50

Lower Provincial Sales Tax

The provincial sales tax on third-party motor insurance has also been reduced from:

• 15% to 5%

These reductions are intended to lower policy costs for vehicle owners while encouraging compliance.

Sindh Introduces CNIC-Based Vehicle Registration

Alongside the insurance reforms, Sindh has approved a CNIC-based vehicle registration system.

Instead of linking registration numbers solely to a vehicle, the ownership record will now be associated with the registered owner’s CNIC.

This modern registration model simplifies ownership management while aligning Sindh’s vehicle administration with more advanced registration systems.

Vehicle Owners Can Keep Their Registration Number

A major benefit of the new system is that owners can now retain their Personalized Registration Marks (PRMs) when selling a vehicle.

Instead of losing the registration number during a sale, owners can transfer it to another vehicle they purchase later.

This provides greater flexibility for motorists who wish to keep their preferred registration numbers.

What Happens If You Don’t Keep Your Number Plate?

If a vehicle owner decides not to retain their registration number after selling a car, the number plate will be surrendered to the Excise Department.

The department may then:

• Reissue the registration number.
• Offer it through a public auction.

Chassis Number Remains the Permanent Vehicle Identifier

Although registration records will now be linked to the owner’s CNIC, the vehicle’s chassis number (VIN) will continue to serve as its permanent physical identifier.

This ensures each vehicle remains uniquely identifiable regardless of ownership changes.

Digital Insurance Verification Through SECP’s Motor Insurance Repository

To improve transparency and eliminate fake insurance policies, the Securities and Exchange Commission of Pakistan (SECP) has integrated its Motor Insurance Repository (MIR) with provincial systems.

This allows Excise officials to verify insurance coverage digitally before approving vehicle-related transactions.

How the Digital Verification System Works

The integrated system includes several important features:

• Insurance companies upload policy details directly to the MIR database.
• Excise officials verify insurance electronically before processing token tax payments and ownership transfers.
• Insurance facilitation desks are being established to assist vehicle owners.
• A dedicated 24/7 helpline will support claim processing.
• Claims are expected to be settled within 45 days.

The digital verification process is designed to improve compliance while reducing fraudulent insurance documentation.

What These New Rules Mean for Car Owners in Sindh

If your vehicle is registered in Sindh, you should ensure your third-party insurance policy is active before your next:

• Token tax payment.
• Vehicle ownership transfer.
• New vehicle registration.

Failure to maintain valid insurance could delay or prevent these services from being processed.

Does Third-Party Insurance Cover Your Own Car?

No.

Third-party motor insurance only covers damage, injury, or death caused to other people and their property.

It does not cover damage to your own vehicle resulting from accidents, theft, fire, floods, or other risks.

If you want financial protection for your own vehicle, you will still need a comprehensive car insurance policy in addition to the mandatory third-party insurance.

Frequently Asked Questions

Is third-party insurance mandatory in Sindh?

Yes. Under the amended Provincial Motor Vehicles Ordinance, third-party liability insurance is mandatory for all private and commercial four-wheel vehicles operating in Sindh.

Can I pay token tax without insurance?

No. The Sindh Excise and Taxation Department will require proof of active third-party insurance before processing token tax payments.

Can I transfer my car without insurance?

No. Ownership transfers cannot be completed unless valid third-party insurance is verified.

Can I keep my existing registration number after selling my car?

Yes. Under the new CNIC-based registration model, vehicle owners can retain their Personalized Registration Marks (PRMs) and transfer them to another vehicle.

Does third-party insurance protect my own vehicle?

No. It only covers liability for injuries or property damage caused to third parties. Protection for your own vehicle requires comprehensive car insurance.

Final Thoughts

Sindh’s latest vehicle reforms represent a significant shift in how vehicle registration and insurance are managed across the province. By making third-party insurance mandatory, introducing CNIC-based registration, enabling retention of personalized registration numbers, and implementing digital insurance verification through the SECP’s Motor Insurance Repository, the government aims to improve compliance, streamline administrative processes, and enhance financial protection for road users.

Vehicle owners should ensure they have valid third-party insurance before their next token tax payment, ownership transfer, or vehicle registration to avoid unnecessary delays and remain compliant with the new legal requirements.

Keep reading Wise Wheels blogs for the latest updates on Pakistan’s automotive industry, vehicle regulations, car insurance, buying guides, and expert tips to help you stay informed and make smarter driving decisions.