Message No : 17Sr.No : 572/725
Question By : shakeel abdul majid

Can a Muslim car owner opt for a comprehensive policy for his car? Or should he go for only third party policy as it is compulsory. Can one claim amount more than the premium he has paid for his car? I mean one has paid a premium of 10000 Rs. And in case of an accident can he claim the entire amount of repairs which could be 3 to 4 times more than the premium?

 

Reply By : Asadullah Qasmi
Designation : Mufti, ODI, MMERC, Mumbai 

In the name of Allah the most Gracious the most Merciful
The answer to your question is as follows:
In fact, all forms of the commercial Insurance prevalent in the traditional Insurance companies are against the Islamic principles because they have either an element of riba or the element of qimar or gharar.
The insurance of cars or other goods with the traditional Insurance Companies is a commercial transaction in which the person who wants to insure his goods or car is bound to pay a premium to the company in accordance with the prescribed conditions. This payment is certain and mandatory without it insurance is not possible. But on the other hand, the payment by the company is not certain. It is contingent upon an event or accident which may or may not occur. If the accident takes place, the company is bound to pay an amount far more and higher than the amount of the premium paid by the insured, but if the accident does not take place, the company does not pay to him anything and the premium paid by him goes without any return. In other words, the insured is bound to pay in any case while the company may or may not pay. Such kind of transaction is termed as gharar and Qimar and is strictly prohibited in Shari'ah.
Moreover, if the accident takes place, the amount of insurance is paid to the insured as a consideration of the amount of premium. It is again repugnant to the well-settled principle of Shari'ah that where money is exchanged for money, both the amounts should be equal in quantity. Any increase on either side is 'riba' which is clearly prohibited by the Holy Qur'an and Sunnah.
However come to the answer it should be remembered that if the car insurance is so necessary that no driving license is permitted without it or third party insurance is a mandatory legal requirement for every car-owner, then it is permissible due to need and impossibility for him to avoid it. But, one should not demand the additional amount and should take only as much money as deposited.(And Allah Knows the Best)

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