Fatwa related to Insurance – Ruling on Life and Property Insurance

Question: What is the ruling on insurance, whether it be life-insurance or property insurance?

Answer: Insuring one’s life and property is forbidden; it is not permissible due to the fact that Al-Gharar¹ Al-Gharar: The selling of that which is not present, such as selling fish before they are caught, or selling birds before they are caught, etc. and usury are involved therein. And Allaah, the Almighty, the All-Powerful has forbidden all types of dealings that involve usury and dealings in which there is Al-Gharar, as a mercy for the (Muslim) community and a protection for them from what is harmful to them. Allaah, the Most Glorified, the Most High says in Surat Al-Baqarah (2:275):

وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا

“Whereas Allaah has permitted trading and forbidden Riba.”

It has been authentically reported from the Messenger of Allaah (Salla-Allaahu ‘alayhi wa sallam) that he forbade selling Al-Gharar. And Allaah is the Granter of success. 

Shaikh Ibn Baaz

Source:

  Fatawa Islamiyah

The Ruling on Insuring Cars

Question: A questioner is asking about the ruling on insuring cars, since the daily car rental agencies in airports insure their cars. If a person rents a car from them, he would pay approximately 30 riyals as insurance on the car, so that if the car is involved in an accident, the company would bear the cost of the repair if it was the fault of the one who rented the car. Advise us and may Allaah reward you with goodness.

Answer: Insurance is, in my opinion, harmful, because the company might take sums of money from the insured every year without doing anything for them, and they might not require it (the money) for repairs or anything else. They might take only small sums of money from others and lose large amounts on it. There are some car owners who have little faith and fear of Allaah, the Most High. So, when one of them insures his car, he does not care what happens; he exposes himself to risks and drives carelessly, which results in accidents and people being killed. The belief that lives and property should be respected is destroyed, but that does not bother him, because he knows that the company will bear the responsibility for the results of his actions. So, I say that this insurance is not permissible under any circumstances for these reasons and others, whether upon cars, lives, properties or other things.

Shaikh Ibn Jibreen

Source:

  Fatawa Islamiyah

If Car Insurance is mandatory by law, is it permissible to submit a claim for the car repairs to the insurance broker?

Question: In this country, car insurance is required by law. If one has a car accident, is it permissible to submit a claim for the car repairs to the insurance broker?

Answer: If it is compulsory and a person has no choice, they should not take more than what they paid because this is a form of gambling.

For example, if a person pays ten thousand to an insurance company, they should take ten thousand only and if they pay four thousand only, they should take four thousand only; for it is not permissible to accept any profit. If one receives an additional amount, it should be given in charity.

Source:

  Fatwas of Ibn Baaz – http://www.alifta.com

The Ruling on Commercial Insurance

Question:  If a businessman makes a deal with a foreign company for rice, sugar, or tea, for example, the businessman takes out insurance on the property against shipwreck, fire, and catastrophe and he pays for the insurance at a rate of 2% against the value of the property. Then when the property arrives, if any loss has occurred, he submits a claim to the insurance companies and they reimburse him for the value of the loss. Even if the ship sinks, the insurance company will compensate him for the whole value of the property. What is the ruling?

 
Answer: If the matter is as mentioned, then that is the type of commercial insurance that is forbidden because of the excessive harm and the gambling it includes; and both of these are major sins. May peace and blessings be upon our Prophet Muhammad (Salla-Allaahu ‘alayhi wa sallam) and upon his family and Companions.

The Permanent Committee

Source:

  Fatawa Islamiyah

Ruling on working in an Insurance Company

Shaikh Ibn Baaz (Rahimahullaah) answered: “We advise you not to work in insurance companies. This is because insurance involves Gharar (ambiguity) and Riba (usury). It is not permissible legally to work with them, and Allaah (Ta’ala) says in Surat Al-Ma’idah (5:2):

وَتَعَاوَنُوا عَلَى ٱلْبِرِّ وَٱلتَّقْوَىٰ ۖ وَلَا تَعَاوَنُوا عَلَى ٱلْإِثْمِ وَٱلْعُدْوَٰنِ ۚ

“…And help you one another in Al-Birr and At-Taqwa (virtue, righteousness and piety); but do not help one another in sin and transgression…”

The commercial insurance companies are based on ignorance and Gharar (deception) in wealth that they take and give the people. Therefore, that which we know and give Fatwa reporting, and which the prominent scholars have given their Fatwa regarding, is the prohibition of the commercial insurance; and being involved with them is a kind of approval and help for what is not permissible.

Source:

  binbaz.org.sa

Ruling on Medical Insurance made by institutions and companies for the employees and their families

Question: Some private companies and businesses offer medical insurance to their employees and their families. To provide this service, they make an agreement with some private hospitals. This agreement is as follows:

1. The company pays the hospital a fixed monthly amount of 100 riyals for each employee, regardless of the number of times they visit the hospital for treatment.
2. The hospital is responsible to treat the employees, giving them the necessary medications and performing surgery for them when necessary. It is important to mention that the hospital spends more than 100 riyals some months on treating an employee, especially when the person has an operation.

At other times, an employee may not visit the hospital at all; thus, he does not benefit from the 100 riyals, or he may benefit only from a small amount. The question now is: First, is this type of medical insurance permissible or does it involve uncertainty and deception? Second, does this kind of insurance fall under the permissible Ji’lah (payment for a permanent job, not a fief) as some researchers have said (i.e. Majallat Al-Buhuuth Al-Fiqhiyyah Al-Mu’asirah – “Contemporary Jurisprudence Research Journal”, issue no 31)? Third, what are the characteristics of a lawful cooperative medical insurance?

Answer: The transaction mentioned in the question falls under the category of prohibited commercial insurance, which involves uncertainty, deception and devouring people’s money falsely. The permissible cooperative medical insurance is to establish a charity fund that is paid to help the needy and sick people without the donor expecting any financial benefit from it. Giving the money to the fund should only aim at helping the needy and hoping for the reward from Allaah (Exalted be He). May Allaah grant us success. May peace and blessings be upon our Prophet Muhammad (Salla-Allaahu ‘alayhi wa sallam), his family and Companions.

Permanent Committee for Scholarly Research and Ifta’.

[Issued by the Permanent Committee, Fatwa no.19399]

Source:

  alifta.com – Issued by the Permanent Committee

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