Insurance

Question ID: 39530
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In England to have car insurance is compulsory. Talking to ulema, they state that third party only is allowed. However discussing this with my friend, who is also an aalim, we wanted to know what if full comprehensive insurance is cheaper than third party insurance e.g. full comprehensive was 600.00 and third party was 1000.00, which happens sometimes. So even in this case would one have to buy third party Insurance or not?

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Asked on January 1, 1970 12:00 am
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Although all of the conventional schemes of insurance violate certain injunction of Shariah and are therefore not permissible. However, if a Muslim is obligated by the law to have an insurance cover, it is permissible for him to have insurance up to the minimum level required by law. Since the third party insurance is obligatory by the law in most of the countries this has been allowed by the Shariah scholars but if full comprehensive insurance is cheaper than the third party insurance and it can fulfill the requirement of law and after that one does not need to enter into a third party insurance then it will be permissible to have full comprehensive insurance to meet the requirement of law.

But two points must be kept in mind in this respect: First, merely on the ground that the full comprehensive insurance is cheaper, both kinds of insurance cannot be held simultaneously if the law does not require so. Second, in case the full comprehensive insurance is undertaken to meet legal requirement and the insured person is offered a compensation only to the extent of the total premium he paid to that company so far (it may include the premium to the same company with regard to some other items also) and the rest of the compensation must be given in charity.

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Answered on January 1, 1970 12:00 am