(#142)
Question
السلام عليكم ورحمة الله وبركاته
Is car insurance is haram or permitted considering that my employment contract includes that i have to insure my car as part of my job is using the Vehicle to visit customers.
Answer
بسم الله الرحمن الرحيم
السلام عليكم و رحمة الله و بركاته
حامدا و مصليا و مسلما
Muhtaram
We have received your query dated 30/04/22, please excuse us for the belated reply, our response is as follows:
All forms of voluntary insurance are not permissible in Islam. This prohibition would include life insurance, insurance of property and insurance of motor vehicles, be it comprehensive or opposite-party insurance. The reason is that there are two Haraam ingredients involved in insurance schemes, one being interest and the other, gambling. The interest aspect comes in when, after paying a minimal amount of premiums, a substantially greater amount is received to cover one’s losses. The gambling aspect comes to the fore due to the fact that insurance is like a game of chance: If you suffer a loss in your property or vehicle, you would receive a monetary kickback from the insurance company that would be far in excess of the premiums paid in by you. If on the other hand, there is no loss sustained, then instead of receiving something back, you would have to forfeit the entire premiums that you paid in.
Together with the above Haraam elements a third element is also found which is the element of Gharar [uncertainty]. In such a scheme there is no guarantee when the money or service will be received as it will only materialize once an accident occurs and there is no guarantee that the policy holder’s car will ever encounter an accident or an illness needing medical attention. A transaction which is based on Gharar [uncertainty] is not permissible in Islam. See Mabsoot vol. 13 pg. 194
We should abstain from getting involved in such prohibited forms of insurance and place our trust in ALLAH TA’AALA with the firm conviction that only He will protect our assets and protect us from financial predicaments. If we keep our Yaqeen (conviction) strong then surely Allah Ta’ala will assist us in such matters from unimaginable sources.
Allah Ta’ala says in the Noble Qur’an:
“He who fears Allah Ta’ala, for him He prepares a way out, and He provides for him from sources he could never imagine.” {Surah65 Verse2/3}
(Ref: Fataawa Mahmoodiyah Vol 16 Pg 387; Fataawa Raheemiyah Vol 6 Pg 133; Contemporary Fataawa Mufti Taqi Uthmaani Pg186, Madrasah Arabia Islamia Darul Ifta Archives).
Therefore, it will not be permissible to involve oneself in any insurance schemes as it not compulsory in New Zealand. Furthermore, for one to get involved in an insurance scheme and thereafter for one to cancel it (as is common amongst some) will also be impermissible as this is deception and telling a lie to one’s employer/company, thus such an action can never be sanctioned, even more so when the one involved is a Muslim as it also involves the risk of a Muslim putting the name of Islam into disrepute.
If we venture into a form of business which is free from insurance or any other impermissible elements then Allah Ta’ala will grant one Barakah in ones earnings and inshallah in a small quantity one will be able to achieve much more.
And Allah Ta’ala knows best
Muhammad Irshad Motara
4th Zhul Hijjah 1443
4th July 2022
Checked and approved by:
(Mufti) Musayyab Sahib
