Does car insurance cover passengers in Pakistan? Evidence to ask for

Does car insurance cover passengers in Pakistan? On a national highway, the law says a vehicle must carry “No Fault Accident Compensation” insurance from a registered insurer, and that compensation is payable to any person who is killed, injured or suffers property damage through the use of that vehicle. It does not require anyone to prove the driver was at fault. A passenger contract that tries to exclude liability for a passenger’s death or bodily injury is void. That is the floor. What the law does not tell you is how much a particular policy pays, whether the vehicle in front of you is insured for hire at all, or whether the certificate is still valid on the day of travel. Those answers live in documents, not in assurances.

So the practical answer for a buyer is: yes, passengers have statutory protection on the national highway network, but the amount and the paperwork vary, and you should ask for the insurance certificate, check it matches the vehicle and the use, and close any gap with travel or corporate cover. The rest of this guide shows how.

Does car insurance cover passengers? The decision summary

For anyone booking cars for staff, guests or family, the question splits into three smaller ones:

• Is there a legal duty to insure? Yes. On national highways, the National Highways Safety Ordinance 2000 makes it an offence to use a road vehicle without no-fault accident compensation insurance, unless the vehicle is covered by one of the recognised transport co-operative schemes the ordinance names.
• Is the passenger within scope? The compensation section refers to “a person” who suffers death, injury or damage from the use of a road vehicle. It is not limited to pedestrians or other drivers, and a separate clause voids any passenger contract that restricts liability for a passenger’s death or bodily injury.
• Is it enough? Not necessarily. The compensation is “such compensation as may be prescribed by the Government”, and the ordinance expressly preserves the right to claim additional sums under other law. That gap is where travel, personal accident and corporate policies earn their premium.

What passenger insurance Pakistan law requires on national highways

The key text is the National Highways Safety Ordinance 2000, published by the National Highways and Motorway Police. It was gazetted in September 2000 as Ordinance XL of 2000 and governs driving on national highways, which it defines by reference to the National Highway Authority Act 1991. City streets and provincial roads are a different rulebook, which we come to below. The copy NH&MP hosts is the gazetted original; check with the insurer or a lawyer whether later amendments affect a specific point.

Section 41: the duty to insure

Section 41 says no owner shall use, or permit the use of, a road vehicle on a national highway, and no driver shall drive it there, unless it is covered by “No Fault Accident Compensation” insurance from a registered insurance company. The one carve-out is a vehicle covered by the Pakistan Transporters Mutual Assistance Co-operative Society, the Pakistan Automobile Association or another road transport co-operative recognised by the authorities. Sub-section (2) is the part that matters to passengers: a claimant does not have to plead or establish that the death or permanent disablement resulted from the fault of the owner or driver.

Section 87: who pays, and how fast

If a person suffers death, bodily injury or property damage because of the use of a road vehicle on a national highway, section 87 makes the insurer (or the recognised society) pay the prescribed compensation. If the vehicle has no cover at all, the owner pays. The money is due to the legal heirs in the case of death, or to the injured person, within thirty days of the accident. If it is not paid, it becomes recoverable under the provisions of the Provincial Motor Vehicles Ordinance 1965.

Two further clauses are the ones a procurement lead should quote in a contract review:

• Section 87(3): the prescribed compensation does not stop the person receiving any additional sum they are entitled to under any other law.
• Section 87(4): any contract for carrying a passenger in a motor vehicle is void so far as it tries to negate or restrict liability for the passenger’s death or bodily injury.

In plain terms, an operator’s booking terms cannot simply waive passenger injury claims. A clause that says “passengers travel at their own risk” does not do what it appears to do on a national highway.

The certificate has to travel with the car

The same ordinance requires the driver on a national highway to produce, on demand by a uniformed police officer, the driving licence, the certificate of insurance and the registration certificate, plus the fitness certificate and route permit where the vehicle is a transport vehicle. Private motorists who are caught without the papers get fifteen days to produce the originals at the patrol post, but the ordinance withholds that grace from anyone driving as a paid employee and from the driver of a transport vehicle. A hired car with a professional driver falls squarely in that group. Driving a transport vehicle without a certificate of insurance is also on the list of offences for which an officer may arrest without warrant, and a registering authority may suspend the registration of a vehicle that is not insured as the ordinance requires.

For a buyer, the operational reading is simple: if the driver cannot show the certificate at pickup, the vehicle is not ready for a motorway leg.

Off the national highways

Airport runs, hotel transfers and meetings inside Lahore, Karachi or Islamabad mostly happen on city and provincial roads, where the provincial motor vehicles law applies rather than the NHSO. The NHSO itself points to the Provincial Motor Vehicles Ordinance 1965 as the route for recovering unpaid compensation, which tells you the two regimes are designed to work together. We are not going to paraphrase provincial sections here: provinces amend their own versions, and the wording that governs a claim is the wording in force on the date of the accident. The buyer’s safeguard is identical on both road types. Ask for the certificate, read it, and do not accept “the car is insured” as an answer.

Third-party, comprehensive and commercial vehicle insurance in Pakistan

Insurance wording varies by insurer, but the building blocks are standard. Third-party cover protects the policyholder against claims for injury or damage to a third party or their property after a crash. Comprehensive cover is the widest form: it adds damage to the insured vehicle itself from fire, theft or a collision. The general definitions of vehicle insurance types are a useful primer if these terms are new.

What changes for commercial vehicle insurance in Pakistan is the use. The NHSO defines a public service vehicle as any road vehicle used or adapted to carry passengers for hire or reward, including a motor cab or contract carriage, and it separates a “motor cab” (hire or reward) from a “motor car” (not used for hire or reward). A policy written for private use on a car that is actually carrying paying passengers is the classic mismatch an insurer may later dispute. You cannot fix that after the accident.

Read the table this way: the first row is the law, rows two to four are what the operator buys, and row five is what you buy.

Reading an insurance certificate for a hired car

An insurance certificate for a hired car is a one-page answer to five questions. If any one of them is blank, illegible or wrong, stop and ask.

1. Who is the insured? The name should be the registered owner or the operating company that holds the vehicle. If the certificate names a private individual and the invoice names a fleet company, ask how the two are connected. The NHSO defines the owner as the person in whose name the vehicle is registered, which is why that name matters.
2. Which vehicle? Registration number, and ideally chassis and engine numbers, must match the car that actually arrives. Substitutions happen: a booked Corolla becomes a similar car on the day. Each vehicle needs its own match.
3. What use is permitted? Look for wording that covers carrying passengers for hire or reward, or commercial or rental use. “Private” or “social, domestic and pleasure” use on a car being paid to carry your staff is a red flag worth raising before travel.
4. What period? Check the start and expiry dates against every travel day, including the return leg. Monthly and long-term hires cross renewal dates more often than people expect.
5. Who is the insurer? The company should be a licensed insurer. SECP, which regulates the insurance sector, publishes a current list of active insurers on its insurance data page. Compare the name exactly; similar-sounding names are not the same company.

A certificate proves cover exists. It rarely states limits. For those, you need the policy schedule, and in particular any clause that defines passengers, occupants or third parties.

A procurement insurance evidence checklist

Use this as the insurance section of a supplier onboarding pack or an event transport contract. It is written for a company or organiser booking cars with drivers, but a family planning a wedding convoy can use the same list in a shorter form. Keep the “ask” and “verify” columns separate: suppliers can supply documents, only you can check them.

Ask the supplier for

• The insurance certificate for each vehicle nominated for your booking, not a fleet brochure.
• The policy schedule showing cover type (third-party or comprehensive), the permitted use and any passenger or personal accident extension, with sums insured.
• Written confirmation of how the vehicle meets the no-fault accident compensation requirement on national highways: insurer name, or the recognised co-operative scheme and membership number.
• The registration certificate and, for vehicles classed as transport vehicles, the fitness certificate and route permit the NHSO says a driver must be able to produce.
• The driver’s licence category and expiry for each nominated driver.
• A named contact for accident reporting, and the insurer’s claims line.
• Notice before any vehicle substitution, with the replacement vehicle’s documents.

Verify yourself

• Registration number on the certificate equals the number plate and the registration book.
• Insured name is consistent with the owner or the contracting company.
• Policy period covers every day of service.
• Permitted use covers carrying passengers for hire or reward.
• Insurer appears on the SECP active insurers list.
• No clause in the supplier’s terms tries to exclude liability for passenger death or injury. On a national highway such a clause is void under section 87(4), and its presence tells you something about how the supplier reads its own obligations.
• Your own travellers have travel or corporate cover that includes Pakistan and the specific region of travel.

Worked example, for illustration only: a company books three cars for a two-day Islamabad and Lahore roadshow. The pack should contain three certificates, three schedules, three registration copies and the drivers’ licence details, all dated to cover both days and the motorway transfer between the cities. If the supplier sends one certificate “for the fleet”, the checklist has done its job by making the gap visible before departure.

Where travel and corporate insurance fill the gap

Statutory motor compensation is designed as a floor for road victims. It is not designed to fly an injured executive home, pay a private hospital in Lahore, or cover the cost of a cancelled programme. Those risks sit with the traveller’s own policy or the employer’s.

For visitors and overseas Pakistanis

The UK Foreign, Commonwealth and Development Office tells travellers to Pakistan that travel insurance could be invalidated if you travel against FCDO advice. That advice currently includes against-all-travel warnings for the whole of Balochistan, a long list of Khyber Pakhtunkhwa districts including Peshawar city, and the Karakoram Highway between Mansehra and Chilas, with all-but-essential warnings for other areas such as Azad Jammu and Kashmir and Sindh north of Nawabshah. Read the current map before you plan a route, because it changes. A perfectly insured car does not rescue a travel policy that lapsed the moment the itinerary crossed into an advised-against area. If something goes wrong, the FCDO’s own guidance is to contact your travel provider and your insurer.

For companies

The employer’s travel policy is the natural home for medical, evacuation and disruption risk. Before approving a Pakistan trip, check three things with your broker or insurer: that Pakistan is within the territorial scope, whether any regions are excluded, and whether road travel with a hired driver is treated differently from self-drive. Self-drive raises a separate question about who is the insured driver, which is one reason to weigh a car with a driver instead.

For pilgrims travelling on

Families flying from Pakistan to Makkah and Madinah face the same question twice, once at home and once in Saudi Arabia. Our sister company Hajj Umrah Taxi has a separate guide on what “covered” actually means for Hajj and Umrah transport, which is worth reading before the Saudi leg.

If a claim goes wrong: insurer first, then the Ombudsman

Disputes with an insurer in Pakistan have a free, specialist route. The Federal Insurance Ombudsman exists to resolve disputes between policyholders and insurance companies, operating under the Insurance Ordinance 2000 and the Federal Ombudsmen Institutional Reforms Act 2013. It describes relief as cost-free, runs a helpline on 1082 (9am to 5pm), and accepts complaints through its website.

The timing rules come from section 129 of the Insurance Ordinance 2000, which the Ombudsman publishes on its site:

1. First, tell the insurance company in writing that you intend to complain.
2. If it does not respond, or its reply is unsatisfactory, within one month, you may file with the Ombudsman.
3. File within a further three months. The Ombudsman can condone a late complaint if there were reasonable grounds for the delay.
4. The complaint is made in writing on solemn affirmation or oath, with full particulars of the transaction and your name and address.

Two limits are worth knowing. The Ombudsman will not take a matter already pending before a court or tribunal, and its jurisdiction is over maladministration by insurance companies. A dispute with a transport operator about service quality is not an insurance complaint; a refused or delayed claim under a policy usually is.

How this fits a booking through iDrive

iDrive is a booking platform, not the transport operator. Our terms of hire set out that iDrive arranges bookings as the disclosed agent of independent partner operators, and that the contract for the journey itself is with the partner. That is precisely why the checklist above matters: the insurance that responds after an accident is the operator’s, and the evidence should come from the operator.

In practice, put your insurance requirements in the booking notes or the enquiry for a business travel car service in Pakistan, and ask for the vehicle documents before confirming. For a senior visitor or a board-level programme, the chauffeur service page explains how dedicated car-and-driver bookings are arranged. Longer engagements through monthly driver hire deserve a renewal check at least once a month, because a certificate can expire in the middle of a contract. If a partner cannot produce a document you asked for, treat that as information and decide accordingly; no quote is a commitment until it has been accepted and the details are confirmed.

Landing into a day of meetings? Our sister service Pakistan Taxi, one of the iDrive brands, covers the timing side in its guide to combining an airport pickup with business meetings, and the same documents apply. When your requirements are clear, start a journey request on iDrive and include the insurance evidence you need in the notes.

Questions people ask

Are taxi passengers covered by insurance in Pakistan?

On national highways, the vehicle must carry no-fault accident compensation insurance or equivalent co-operative cover, and compensation is payable to any person injured, or the heirs of anyone killed, without proving fault. The amount is prescribed by the Government, and further claims under other law remain open.

Can a car hire company make me sign away passenger injury claims?

Under section 87(4) of the National Highways Safety Ordinance 2000, a contract for carrying a passenger is void to the extent it tries to negate or restrict liability for the passenger’s death or bodily injury.

Who do I complain to if an insurer rejects a claim unfairly?

Write to the insurer first. If there is no satisfactory reply within one month, you can complain to the Federal Insurance Ombudsman within a further three months. The Ombudsman describes the process as cost-free.