Category: Business Matters
Fatwa#: 39379
Asked Country: United Kingdom

Answered Date: Nov 19,2017

Title: Insurance, Car Insurance and paying for damage

Question

I have 2 questions 

1) Why is insurance haraaam?

2) Just say person (A) who has a £500 car crashes in to person (B) car & that is worth £70,000 - is the  person(A)  responsible to pay for the damage to person (B)? if yes then how is person (A) going to pay, he can't afford it , if no then person (B) is in big lost because his car is worth £70,000

This is why insurance was invented so the person (A) who can't afford to pay, the insurance company could cover the cost for the damage or purchase a new car for person (B)

Answer

In the Name of Allaah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

  1. There are three prohibited elements found in conventional insurance:
    1.                     i.     Gambling:

In the cited example, if A takes out an insurance policy, and pays a monthly premium, there is a possibility that he may not meet up in an accident. In that case, the insurance company benefits from the monthly premium. If he does meet up in an accident, the insurance company makes a payout. The company will lose out. At the time of entering the contract, the possibility of losing one’s money or gaining is possible. This is clearly gambling which is expressly prohibited in the Qur’aan. Allaah Ta’aala says:

يَسْأَلُونَكَ عَنِ الْخَمْرِ وَالْمَيْسِرِ قُلْ فِيهِمَا إِثْمٌ كَبِيرٌ وَمَنَافِعُ لِلنَّاسِ وَإِثْمُهُمَا أَكْبَرُ مِنْ نَفْعِهِمَا 

Translation: They inquire from you in regards to wine and gambling. Say: In both there is great sin, and some benefits for people. And their sin is greater than their benefit.”

(Surah Al-Baqarah, v. 219)

 

 

  1.                   ii.     Interest:

In the above example, if A takes out an insurance policy, and pays a monthly premium, and thereafter meets up in an accident, the insurance company will make a payout which may be more than the monthly premium paid by A. This is clearly interest which is expressly prohibited in the Qur’aan. Allaah Ta’aala says:

الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَنْ جَاءَهُ مَوْعِظَةٌ مِنْ رَبِّهِ فَانْتَهَى فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِ وَمَنْ عَادَ فَأُولَئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ (275) يَمْحَقُ اللَّهُ الرِّبَا وَيُرْبِي الصَّدَقَاتِ وَاللَّهُ لَا يُحِبُّ كُلَّ كَفَّارٍ أَثِيمٍ (276) إِنَّ الَّذِينَ آمَنُوا وَعَمِلُوا الصَّالِحَاتِ وَأَقَامُوا الصَّلَاةَ وَآتَوُا الزَّكَاةَ لَهُمْ أَجْرُهُمْ عِنْدَ رَبِّهِمْ وَلَا خَوْفٌ عَلَيْهِمْ وَلَا هُمْ يَحْزَنُونَ (277) يَاأَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ (278) فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ (279) وَإِنْ كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَى مَيْسَرَةٍ وَأَنْ تَصَدَّقُوا خَيْرٌ لَكُمْ إِنْ كُنْتُمْ تَعْلَمُونَ (280) وَاتَّقُوا يَوْمًا تُرْجَعُونَ فِيهِ إِلَى اللَّهِ ثُمَّ تُوَفَّى كُلُّ نَفْسٍ مَا كَسَبَتْ وَهُمْ لَا يُظْلَمُونَ (281)

Translation: Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allaah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allaah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.

Allaah destroys interest and gives increase for charities. And Allaah does not like every sinning disbeliever.

Indeed, those who believe and do righteous deeds and establish prayer and give zakaah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve.

O you who have believed, fear Allaah and give up what remains [due to you] of interest, if you should be believers.

And if you do not, then be informed of a war [against you] from Allaah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.

(Surah Al-Baqarah v. 275-281)

 

Sayyiduna Abdullaah ibn Mas’ood (Radhiyallaahu ‘anh) narrates,

لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وشاهده وكاتبه

Translation: “Rasulullaah (Sallallaahu ‘alaihi wasallam) has cursed the one who consumes interest, the one who pays it, the one who witnesses it and the one who records it.”

(Abu Dawood 3333, Nasaai 5105, Muslim 1598)

 

  1.                  iii.     Uncertainty:

In the quoted example, if A takes out an insurance policy, and pays a monthly premium, there is a possibility that he may or may not meet up in an accident. If he meets up in an accident, he benefits and if he doesn’t then the insurance company benefits from the monthly premium. A pays the monthly premium for an uncertain future event. This is gharar (uncertainty) which is prohibited. Sayyiduna Abu Hurairah (Radhiyallaahu ‘anh) narrates:

نهى رسول الله صلى الله عليه وسلم عن بيع الحصاة، وعن بيع الغرر.[1]

Translation: “Rasulullaah (Sallallaahu ‘alaihi wasallam) forbade transactions determined by throwing stones, and transactions which involve uncertainty.”

(Muslim 1513)

 

 

  1. If person A is at fault, he will be liable for the damages he caused to person B[2].

 

If conventional insurance is invented to overcome the burden on A, then it can also be overcome by other mechanisms, for example creating a Shari’ah compliant insurance scheme.

 

And Allaah Ta’aala Knows Best

Muajul I. Chowdhury

 

Student Darul Iftaa

New York, USA

 

Checked and Approved by,
Mufti Ebrahim Desai.



[1]  صحيح مسلم (3/ 1153)

(1513) وحدثنا أبو بكر بن أبي شيبة، حدثنا عبد الله بن إدريس، ويحيى بن سعيد، وأبو أسامة، عن عبيد الله، ح وحدثني زهير بن حرب، واللفظ له، حدثنا يحيى بن سعيد، عن عبيد الله، حدثني أبو الزناد، عن الأعرج، عن أبي هريرة، قال: «نهى رسول الله صلى الله عليه وسلم عن بيع الحصاة، وعن بيع الغرر»

 

الأصل للشيباني ط قطر (2/ 419)

وبلغنا عن رسول الله - صلى الله عليه وسلم - أنه نهى عن شرى حَبَل الحَبَلَة، ونهى عن بيع الغرر

 

 

[2]  تكملة فتح الملهم (2/523)

والظاهر أن سائق السيارة ضامن لما أتلفه في الطريق سواء أتلفه من القدام أو من الخلف

 

قرارات وتوصيات مجمع الفقه الإسلامي الدولي المنبثق عن منظمة المؤتمر الإسلامي (1/133)

الحوادث التي تنتج عن تسيير المركبات تطبق عليها أحكام الجنايات المقررة في الشريعة الإسلامية، وإن كانت في الغالب من قبيل الخطأ والسائق مسؤول عما يحدثه بالغير من أضرار، سواء في البدن أم المال إذا تحققت عناصرها من خطأ وضرر

 

فتاوى عثماني (3/544)

فتاوى دار العلوم زكريا (4/612)

 

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