Message No : 4Sr.No : 73/722
Question By : Hussain Ali Dharamsi

Assalam alaikum
Please also send me the details about the Insurance
and Shariah, as I got limited information from IOL.
I want to know from Indian system and circumstances
prevailing in Darul harb and darul qufr.

Hussain Ali Dharamsi


Reply By : Nazar Kaleem Qudsee
Designation : Mufti: ODI, MMERC, Mumbai 

Dear Brother in Islam

The issue of Insurance is one of the most remarkable issues which has many complications.
As for the obvious law of Islam in respect of Insurance is apparent and manifest. This is very reason that Insurance, according to its constituents is prohibited, without any difference, to every Allah fearing Scholars of Islam.
Because Insurance consists Ribaa and Qimaar (Interest & gambling) which have been openly and strictly prohibited in Islam in so extent that Allah has warned against those who deal in Ribaa Transaction. Pl. See verse no. 275 to 281 of Surah Baqrah Chapter 2 of Quran. Similarly there are many Sahee/ Hasan Ahaadeeth in which the prophet (PBUH) has asked Muslims to refrain from the dealing of this social evil.
Now observing the ongoing situation in India, where onslaught of Muslims, setting fire on their properties and conspiracy to weaken them in economy, keeping them from every key-posts and due to certain unnecessary application of taxes, here a question arises that being the insurance prohibited in Islam, whether one can insure his life and property or not only for the sake of safety not for earnings.
There three group of Opinions.
1. Allowed in every situation without any condition.
2. Prohibited in every situation.
3. Allowed in a few situation with some condition.
The first two opinions are incorrect. Why ? it needs a long discussion and have been discussed time and again, more than onetime in past and present perfect both. For details one may refer to the report of 4th Seminar held in Darul Uloom Sabilus Salaam Hyderabad regarding exchange of Currencies and Insurance. The report can be have from Islamic Fiqah Academy New Delhi-110025.
(The name of book where report has been published in thoroughly is Jadeed fiqhee Mabaahith. Vol. 4)
The opinion which allows to hold Insurance Policy particularly of goods and responsibilities are surrounded with some conditions :

1. Intention of policy holder should be only safeguard, not earnings.
Since this permission is on the ground of famous principal of Fiqh, ''Ad-da-ra-ro Yodaal and Ad-darooraat Tobeehul Mahdooraat ''( Damage and loss would be vanished, in rainy days and unavoidable needs, prohibited things are allowed) policy should not be misused.
2. Insurance policy would be allowed only in those sensitive areas and localities where life and soul, goods and property are safe from hooligans and ruffians only when Insured.
3. The excess amount on capital gained after maturity date should be spent out on poor and downtrodden people of the society. Policy holder is not allowed to use that excess amount but he becomes helpless.
1. Fatawa Rahimia. Vol.-6 Page- 133-135
2. Fatawa Mahmoodia. Vol.-4 Page- 240
3. Nizamul Fatawa. Vol.-2 Page- 20
4. Imdadul Fatawa. Vol.-3 Page- 153-161
5. HalaaloHaraam --------ид Page-381-385

There is one more type of Insurance which is compulsory for every govt. servicemen.
Islamic law in respect of this Insurance is that here excess amount is also permissible and allowed like provident fund.
(Imdadul Fatawa. Vol.-3 Page- 153-161)
Now Hindustan is not regarded as ''Darul Harb'' Better it may be called Darul Kufr. Since Kuffar here in India are in majority they govern India, if we Muslim prove to be in majority the constitution will allow us to be the ruler of India.
1. In Darul Harb, Interest gaining is permitted only from Kuffar,
not from Muslims
2. Interest Taking is allowed only for those Muslims who are not resident of Darul Harb but are from any Islamic Country and have come to Darul Harb on Amaan (Asylum) Bond.
3. Therefore it is not permitted for any Indian Muslim to obtain Interest from any Indian Hindus.
4. There are some scholars who regard India as Darul Harb. If someone say that only on the basis of this opinion Insurance, and excess amount gained by Insurance should be Halaal, his decision will not stand correct. Because there are thousands of Muslims who have dealing in Insurance, and every partner in Insurance whether Muslim and non-Muslim, is given interest. If on this ground Insurance is allowed, as a result Muslim too will be taking interest from other Muslim which is not allowed in any case.
(For more detail please see Fataawaa Rahimia Vol-10 Page-
Hope this will suffice you to understand the issue of Riba and Insurance.
Thanking You

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