Q285 :I believe that all Islamic legislation are
perfect and must be obeyed. Also I believe in predestination. I have no
doubt that no individual or group of people can cause me any damage
unless Allah so wishes. Within this framework, I have been wondering
recently on the desirability or otherwise of renewing my car insurance
when it lapses. Perhaps I should say that insurance does not offer any
fabulous prizes as a lottery, but netpensates me for unforeseen loss
when it takes place. No element of interest or usury is involved. I
should add for explanation that many manufacturers of machinery offer a
sort of guarantee on their products for a limited period of time. In
other words, they insure it for the customer. Such a warranty
represents a certain amount of cost to the manufacturer, which is
passed over to the customer and included in the price of the product. I
will be grateful if you netment on this question of car
insurance.
A285 : The question of insurance is a thorny one,
on which scholars have differed greatly. What I am giving you below is
a summary of what I have been able to determine on the basis of study
and discussions with a number of scholars. When you insure a car, you
make a contract with the insurance netpany which requires you to pay a
premium in which the netpany guarantees to undertake any repairs of the
damage which is caused to your car or someone else’s car as a result of
an accident and perhaps netpensates you or the other people involved
for any injury suffered. Some insurance netpanies also offer the use of
a car during the period when your damaged car is being repaired. In
other words, they take care of all the inconvenience which is caused to
you by the accident which may have been the fault of some other driver.
There is certainly no amount of money which is won by the insured.
Insurance is simply meant to cover any loss which may be sustained as a
result of something beyond man’s control. Scholars have tended to view
insurance with suspicion and many of them have over the years ruled
that it is not netpatible with Islam. Much of their argument is based
on the fact that there is an element of uncertainty about what the
insured buys with his premium. It is well known that when you buy
something uncertain, the sale is not allowed from the Islamic point of
view. In insurance you pay your premium and drive your car throughout
the year and may have no accident whatsoever. You make no claim against
the insurance netpany, thus your premium is gone without any material
benefit to you. Hence the question: What have you bought with the money
you have paid the insurance netpany? The absence of any tangible return
makes this restrictive view by scholars even more pronounced. On the
other hand, should you have a serious accident which causes extensive
damage to your car and may be to the other vehicle, the insurance
netpany pays the cost of repairing both vehicles and may netpensate
anyone who has suffered an injury as a result of the accident. What the
insurance netpany pays in such a case is several times greater than the
premium you have paid. In other words, you have paid little and
received much in return. There is no loss to the netpany in this
transaction because it uses the premiums of other insured persons who
may have no accident in order to pay those who make claims as a result
of their accidents. The situation is thus which involves taking money
from those who sustain no loss in order to pay those who do. Again,
this is a point which has tended to confirm scholars’ suspicion of the
insurance contract. When we examine the deal between an insured person
and the insurance netpany, we find that when the insured pays his
premium and receives the insurance policy, he actually gets something
valuable in return, although he may not need to make any claim
throughout the period of cover. What he gets is a peace of mind. He
knows that should he ever be involved in an accident and should the
accident be his fault and result in extensive damage to someone else’s
vehicle as well as his own, then he will not have to pay for the
repairs which may run into a very large amount indeed. Someone else
will take that responsibility, without actually incurring a loss in the
process. Such peace of mind is of value and it is certainly tangible,
although we may not hold it in our hands. The uncertainty which is
pointed out by scholars about the benefits you receive for your premium
is counter-balanced by the certainty that your liability in the case of
an accident is very limited. [That is to say, the day you pay your
premium, you have incurred a loss on that day with an assurance that
you will not be burdened with any further loss through claims during
the period.] As for taking money from people who make no claim and
paying it to those who are involved in accidents, this involves no
element of deception. Everyone netes to the insurance netpany of his
own free will, buying something which he receives immediately, namely,
peace of mind. No one pays his premium for nothing. Those who make no
accidents are happy with the bargain and even happier than those who
have accidents because a car that does not have body repairs remains
better and fetches a better price when sold than the one which has had
an accident. We can netpare the insurance scheme to a cooperative in
which the participants undertake to netpensate any one of them for any
loss he incurs in circumstances beyond his control. Each of them pays a
certain amount of money toward funding this scheme and making this
money available for such netpensation. All scholars agree that when a
group of people undertake to do that of their own accord, this is
perfectly legitimate. What an insurance netpany adds to this agreement
is the fact that it is a third party organizing this scheme. It offers
it to any number of people who are willing to participate in it,
keeping records of participants and claims, collecting premiums and
using them for the purposes they have been collected for. The netpany
pays its share-holders and its staff for the work they do. Moreover, it
is in business for profit and the profit is shared by the netpany
owners. Again, there is nothing wrong with this arrangement. To sum
up, the car insurance is a proper method of protecting people against
suffering a great loss in certain eventualities. It violates no Islamic
teachings and as such it is perfectly permissible. There is nothing in
the insurance contract that suggests that taking part in such a scheme
defies Allah’s will or predestination. It does not. It simply seeks to
netpensate people for the damage they suffer when Allah’s will
operates. Some scholars have advised their questioners to limit their
car insurance to what the law of the country in which they live
requires them to have. This is normally called a third party insurance
which netpensates any person other than you who incurs a loss as a
result of an accident which you have caused. It does not give you or
your car any cover. Thus if you cause an accident which results in
damage to your car and someone else’s car, the insurance netpany will
not repair your car but will repair the other driver’s car. He is the
third party who is covered by this type of insurance. When scholars
give such an opinion, they are simply telling people not to go against
the law of their country of residence. However, there need be no such
limitation. It is perfectly permissible for a Muslim to have a
netprehensive insurance policy of his car.
Our Dialogue ( Source : Arab News – Jeddah )