Car insurance

Optimist

قل هو الله أحد
Apparently it is haram because it contains:

1. Riba (usury). You get more money for what you pay (or the opposite).

2. Gambling.

but it is compulsory in the UK ... you just cant have a car without it and if you get caught driving uninsured you can go to jail.

Do people know of any sound fatwas on this from UK based imams ?
 

dianek

Junior Member
Insurance is required in the US. I don't see how it is considered usry or riba....you pay monthly for a service to protect your car from accident or to cover you from liability if you hit someone. You would have to have it on a house as well. It isn't interest related OR a loan.....
 

manOfpeace

Junior Member
Apparently it is haram because it contains:

1. Riba (usury). You get more money for what you pay (or the opposite).

2. Gambling.

but it is compulsory in the UK ... you just cant have a car without it and if you get caught driving uninsured you can go to jail.

Do people know of any sound fatwas on this from UK based imams ?

:salam2:

I don't know any fatwas about car insurance, but i have car insurance, last year they gave me a Ticket for not having car insurance, so i am also looking for that Fatwas.
 
Apparently it is haram because it contains:

1. Riba (usury). You get more money for what you pay (or the opposite).

2. Gambling.

but it is compulsory in the UK ... you just cant have a car without it and if you get caught driving uninsured you can go to jail.

Do people know of any sound fatwas on this from UK based imams ?

Salaam,

There is a fatwa that says if you are living in a non-Muslim country then you have to abide by the rules. Here in the U.S. I believe everywhere you are required to have a car insurance or else you can get arrested, fined, or even have a litigation thrown at you. I don't pay any interest on my car insurance, because I pay it in full. How else can one afford the cost of an accident for oneself and perhaps the other vehicle?
 

ditta

Alhamdu'Lillaah
Staff member
Asalaamu'Alykum,

Well i remember Shaykh Yasir Qadhi on Islam Channel explaining how car insurance is allowed because it is a necessity otherwise you go to jail as stated. This is the closest thing i can find:

http://www.islamqa.com/index.php?ref=5392&ln=eng

Although i can't find anything in Fatawa Islamiyah.

Wasalam
 

Optimist

قل هو الله أحد
OK, apparently people dont know enough on the subject (which I did not until very recently).

The principle of having a community fund that is used to help people in unforeseen circumstances is well known in Islam and is known as Takkaful. It is in many ways similar to insurance. In Takkaful, the money is donated by a group of people and kept aside, if it does not get used, then it is redistributed to the contributors or given out to charity or invested tin community based projects. By these principles an individual can be allowed to take more money than that he has given (natually not allowed in Islam) as the rest of the money would be seen as a donation from the community to him (or her).

Insurance companies use this need to spong money out of us. The money taken by insurance companies is not returned to the community, and because of this, it becomes like gambling on an individual level.

http://www.islam-qa.com/index.php?ln=eng&ds=qa&QR=36955

I'm personally convinced it is unlawful, but my question is that of necessity, that's why I asked for a UK based imam who knows the circumstances.
 

Sauda17

Junior Member
Salam

Don't know if this is of any use...

Question #1001 you can find this on MuftiSays

Assalaamu 'Alaykum Warahmatullaah,

I know that in the UK it is permissable to have car insurance due to the fact the the law of the land makes it obligatory. However, what happens in the situation where you have insurance and you become involved in a car accident. Is it permissable to claim the money for damages for your car?

References would be appreciated, Jazakallaah.
Answer
Bismihi Ta'ala

You may claim in the limits of what you have paid in insurance. If you claim more than this would be considered Ribaa (usury) which is strictly forbidden.

And Allah knows best.

Apologies still not figured how to add links, so had to copy and paste.
 

Al-Kashmiri

Well-Known Member
Staff member
You praised our noble shaykh earlier (Al-`Uthaymeen rahimahullah) well maybe you should here/read what he said on this. Although I dont have it on me, to paraphrase he said in countries like here it is permissible for us as it is a necessary requirement for travel. However we view the contract as Baatil and void, so if we crash for example, we only take that which we need from the insurance... I'll try and locate it in case I err...

"...However, it has been mentioned to me that in some countries people are forced to take out insurance policies. So what can Muslims do if this is the situation? In my opinion, he should pay whatever money that he is forced to pay for insurance but he should not consider that it is a legal contract or agreement, but rather that it is money paid unjustly under pressure. If no loss occurs, this is by the Grace and Mercy of Allaah towards him and the money has been taken from him unjustly and he shall find it on the Day of Resurrection. In the event that he suffers some loss to his property and the insurance company intends to reimburse him, then, if the amount he is due back is equal to what he paid for his policy, he can justly take it. If, on the other hand, what he is due from the insurance company is more than he paid, he should not take more than the amount that he paid them. In this way, the process will, in my opinion, be in accordance with Islaamic law."

Shaykh Ibn 'Uthaymeen

Optimist I will now quote what you said to me and I'm sure you'll see it appropriate...

Masha'Allah ... sound opinion of Shiekh Uthaymeen as usual ... may Allah (glorified He may be) have mercy on his soul.

AMEEN
 

Peace2u

Turn To Islam
OK, apparently people dont know enough on the subject (which I did not until very recently).

The principle of having a community fund that is used to help people in unforeseen circumstances is well known in Islam and is known as Takkaful. It is in many ways similar to insurance. In Takkaful, the money is donated by a group of people and kept aside, if it does not get used, then it is redistributed to the contributors or given out to charity or invested tin community based projects. By these principles an individual can be allowed to take more money than that he has given (natually not allowed in Islam) as the rest of the money would be seen as a donation from the community to him (or her).

Insurance companies use this need to spong money out of us. The money taken by insurance companies is not returned to the community, and because of this, it becomes like gambling on an individual level.

http://www.islam-qa.com/index.php?ln=eng&ds=qa&QR=36955

I'm personally convinced it is unlawful, but my question is that of necessity, that's why I asked for a UK based imam who knows the circumstances.

Salam,

Interesting, I'm just curious as to what they do in Islamic countries, is there no such a thing as car insurance there?

Peace2u
 

Optimist

قل هو الله أحد
jazaka Allaho khiaran every one

interesting fatwas ... I was thinking about selling the car ... I need to look more into it
 

ditta

Alhamdu'Lillaah
Staff member
Asalaamu'Alykum,

Brother Al-Kashmiri, i am not sure what you are talking about, but i was looking for a ruling in Fatawa Islamiyah, the one published by Darussalam. It had one by Ibn Jibreen (May Allah have mercy on Him) although i decided not to post it though.

Wasalam
 

Al-Kashmiri

Well-Known Member
Staff member
Asalaamu'Alykum,

Brother Al-Kashmiri, i am not sure what you are talking about, but i was looking for a ruling in Fatawa Islamiyah, the one published by Darussalam. It had one by Ibn Jibreen (May Allah have mercy on Him) although i decided not to post it though.

Wasalam

wa`alaykum salaam. My mistake... u remember the volume.
 
In the Name of Allah, Most Gracious, Most Merciful.



All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear questioner, we would like to thank you for the great confidence you place in us, and we implore Allah Almighty to help us serve His cause and render our work for His Sake.

Responding to the question, Dr. Monzer Kahf, Scholar in Islamic Economics & Financial Expert, states the following:

"Insurance service and contracts were invented and developed over the last four centuries in Europe, then extended to the Americas. They reached the Muslim World in the Nineteen century. Obviously, they were not known at the time of revelation of the Shari'ah nor at the time of the great scholars who founded the known Fiqhi Schools.

Over the last more than a hundred years, Muslim scholars considered insurance as a new service that accompanies new risks intrinsic to technological applications, and as a contract. Thus, in addressing it, two points of view have been developed: one that studies insurance within the context of its environment, i.e., the presence of a large number of people exposed to similar risks that call for the application of the theory of probability and what is called the laws of large numbers; the other regards insurance as only a specific relationship between two parties regardless of its environment.

The first trend was led by the late Sheikh Mustafa Al-Zarqa. He argued that, as a new service and contract, insurance companies gather together the risks of a large number of people and redistribute them in a manner that makes them bearable. This is a form of lawful cooperation that is compatible with the general objectives of the Shari'ah and hence the theory of probability is taken into consideration, the insurance contract does not contain any unbearable amount of ambiguity or undue uncertainty.

According to this view all kinds of insurance contracts (cars, hazards, accidents, transportation, life, etc.) are all permissible provided two conditions are fulfilled:

1. The contract must not contain any Riba element.

2. The object of insurance must be permissible in the Shari'ah i.e., insuring a shipment of liquor is not permissible. It doesn't matter whether this cooperation is founded by a group of concerned persons in the form of cooperatives or by a venture person or a company that takes charge of offering the service of pooling together the risks of a large number of persons.

Consequently, car insurance is permissible for the obligatory liability as well as for the value of the car and the hazards to driver and passengers and every other insurance coverage related to cars and driving them.

According to the second view, any conventional insurance contract between two persons contains elements of Riba, ambiguity, and gharar. It entails Riba because you pay small premium and get back a large sum should a risk occur. It also involves gharar because you don't know whether you will get the large sum or not since you don't know whether a hazard will happen, and ambiguity because you don't know the exact amount you get (though you know the maximum only) nor when it is going to be given to you since you don't know when an accident will happen.

This group of scholars argue that these objections may be overridden when the service of insurance is offered on donation basis through cooperatives, because if you give the premium as a donation, it doesn’t involve Riba, ambiguity and gharar because donations are not exchange contracts, and it doesn't hurt if such donations are given to a cooperative whose system is to cover these risks even with the fact that you really know this coverage in advance and you give the donation with the condition that such a coverage exists.

According to this view, only mutual cooperative insurance is permitted, the same two conditions mentioned in the first opinion apply here too. Hence, any insurance outside cooperatives is not permitted, and when you are required by law to take it you only take the part you don't have any choice about it.

In my opinion, there are too artificialities in the second view and I go with the first one, that all insurance is permissible provided that the two conditions are observed."

Moreover, we'd like to add that there is an old argument from the 1950s, even by those who oppose insurance, that whenever insurance is forced by law, one must do it and one is excused, from the Shari'ah point of view. This include car insurance, social security, workman compensation, and employer's imposed insurance if it is not optional for the employee in addition to the case if the insurance provided by the employer is paid completely from the employer, i.e., given as a fringe benefit without deducting any part of the premium from the pay checks, then it is a kind of grant from the employer and if a hazard happens the paid policy amount is halal because the it is an outcome of the grant."

If you have any further questions, please don't hesitate to write back!

May Allah guide you to the straight path, and guide you to that which pleases Him, Amen.
Source: http://www.islamonline.net/servlet/...nglish-Ask_Scholar/FatwaE/FatwaEAskTheScholar
 

q8penpals

Junior Member
Salam

In Kuwait, it is required to have insurance on your car as well. I don't know all the specifics, but I do know that the insurance only covers actual costs or damages.

There are set "settlements" to families if you accidentally kill someone (it is like $20,000, I think) and I do not belive there is anything like punative damages for "pain & suffering" (which is where all the completely outrageous lawsuits fit in - $3 million for spilling hot coffee on yourself, for example!).

Maybe one of the other posters in Kuwait knows more about it than me. Thank God, I have always paid my insurance and Thank God, I have never had to use it! Alhumdillulah! Masha'Allah! (whichever phrase in more appropriate!)

Lana
 

Al-Kashmiri

Well-Known Member
Staff member
Are the "settlements" basically blood-money. There is a lot of road-rage in Kuwait I've heard.

Lana, you reside in Kuwait, some of Al-`Allaamah Ibnu `Uthaymeens, rahimahullah, students reside in Kuwait such as Shaykh Falaah Ismaa`eel and Shaykh Saleem At-Taweel. I can only assume that they, likewise consider it permissible in countries where it is a requirement.
 

q8penpals

Junior Member
Salam

Yeah, I think it is like blood money.

And yes, you are more likely to die as a result of a traffic incident in Kuwait than anything else. The Kuwaiti youth (more specifically, boys/men ages about 15-35) are the deadliest drivers on the road - not just for themselves, but also the accidents they cause other drivers when the swerve in and out of traffic and cause others to have accidents (and by the way, the driving age isn't until 18, but that doesn't stop them at all).

Lana
 
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