Car Insurance

[AbuNuru]

Assalamu alykum shaykh,

Is car insurance in general permissible? If not, are there certain offerings that are permissible - such as 3rd party insurance? 

I ask because it would put enormous difficulty on the average person if they were to be involved in an accident with an expensive car/truck. It may take them decades to pay off the damage.

wassalam.

[Aslam AbuIsmaeel]

Wa alaikumussalaam wa rahmatullah

As you would well know, insurance is prohibited in Islam.

An insurer pays money to the insurance company to insure the item that if any damage occurs unexpectedly (i.e. by the decree of Allah), then the company will pay them for the damages.  This amount of payout may be much more - ten times or even more - than the premium that was paid.  But if there was not such need, then the insurer has paid the premium and received nothing except a preparation of the insurance company for such an incident which may be worth less than the premium.  This scenario as we can well appreciate is very similar to that of Gambling which Allah forbade in the Quran in Surah Baqarah - "They ask you concerning wine and maysir (gambling, chance matters); Say: Therein is a large sin as well as benefits for man but their sin is greater than their benefit."

Therefore, any form of gamble is prohibited.  Insurance involves paying premium and a gamble in case of accident you get much more back and if no accident claims then get nothing of the premium back (even if allow for the relatively little money for the service from the company of being prepared for you in case of accident - that is only a small amount and not proportional to the premium).  Therefore insurance is haraam in Islam.

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Your question is asking about insurance for sever needs, such as a third party insurance cover on cars.  A person may cause an accident to another person or property that is so expensive that it is not bearable by a normal person with a normal wage.  Therefore is third party insurance permissible, you ask as do many Muslims?   Obviously the principle of Shariah that is being sought for here is the principle of avoiding the greater harm (an unbearable pay out) by allowing the lesser harm (3rd party insurance).  Is the harm of the former greater than the latter outweighing it?

Instead of answering it myself, I'll try to ask some of my Sheikhs overseas as it is better for me to not take responsibility for the answer in front of Allah.  I'll try to get back with this soon if Allah permits.

Wassalamu alaikum

[yousuf abu zayd]

Asalaamu alaykum Sheikh Aslam

Have you had any response from your Sheikhs on this question?

Wasalaam
Yousuf