Home » Hanafi Fiqh » Darulfiqh.com » Is It Permissible To Reclaim PPI (Payment Protection Insurance)?

Is It Permissible To Reclaim PPI (Payment Protection Insurance)?

Answered as per Hanafi Fiqh by Darulfiqh.com


Is it permissible to reclaim PPI (Payment Protection Insurance)?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.


It is permissible to reclaim mis-sold Payment Protection Insurance (PPI) up to the amount one has paid to the insurance company in the form of premiums. 

The Fiqh (jurisprudence of the Answer):

Conventional insurance contracts are irregular and voidable (fāsid) contracts.  The ruling of voidable contracts is that they must be nullified if possible[1].  Thus, besides mandatory conventional insurance contracts and permitted insurance contracts based on necessity, the remaining insurance contracts should be nullified. 
Reclaiming PPI will be a means of cancelling your contract[2].  One cannot take more than the amount paid as the excess will be a form of interest.  

And Allah Ta’ālā Alone Knows Best

Mufti Faraz Adam 
The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any institutions to which he may be affiliated.
Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. On the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.
The Shari’ah ruling given herein is based specifically on the scenario in question.  The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage.  This answer may not be used as evidence in any court of law without prior written consent from the author.  Consideration is only given and is restricted to the specific links provided, the author does not endorse nor approve of any other content the website may contain.

[1]  أَنَّ الْبَيْعَ الْفَاسِدَ وَاجِبُ الْفَسْخِ حَقًّا لِلشَّرْعِ رَفْعًا لِلْفَسَادِ (بدائع الصنائع ج 4 ص 102 دار الكتب)

فَصْلٌ فِي الْبَيْعِ الْفَاسِدِ)

أَيْ فِي بَيَانِ أَحْكَامِ الْبَيْعِ الْفَاسِدِ قَدَّمْنَا أَنَّ فِعْلَهُ مَعْصِيَةٌ فَعَلَيْهِ التَّوْبَةُ مِنْهَا بِفَسْخِهِ

(قَوْلُهُ وَلِكُلٍّ مِنْهُمَا فَسْخُهُ) أَيْ يَجُوزُ لِكُلٍّ مِنْ الْبَائِعِ وَالْمُشْتَرِي فِي الْبَيْعِ الْفَاسِدِ فَسْخُهُ رَفْعًا لِلْفَسَادِ، وَذَكَرَ الزَّيْلَعِيُّ أَنَّ اللَّامَ بِمَعْنَى عَلَى لِأَنَّ رَفْعَ الْفَسَادِ وَاجِبٌ، وَلَا حَاجَةَ إلَيْهِ لِأَنَّهُ حُكْمٌ آخَرُ، وَإِنَّمَا مُرَادُهُ بَيَانُ أَنَّ لِكُلٍّ مِنْهُمَا وِلَايَةَ الْفَسْخِ دَفْعًا لِتَوَهُّمِ أَنَّهُ إذَا مَلَكَ بِالْقَبْضِ لَزِمَ فَإِنْ كَانَ قَبْلَ الْقَبْضِ فَلِكُلٍّ ذَلِكَ بِعِلْمِ صَاحِبِهِ لَا بِرِضَاهُ، وَإِنْ كَانَ بَعْدَ الْقَبْضِ فَإِنْ كَانَ الْفَسَادُ فِي صُلْبِ الْعَقْدِ بِأَنْ كَانَ رَاجِعًا إلَى الْبَدَلَيْنِ الْمَبِيعِ، وَالثَّمَنِ كَبَيْعِ دِرْهَمٍ بِدِرْهَمَيْنِ، وَكَالْبَيْعِ بِالْخَمْرِ أَوْ الْخِنْزِيرِ فَكَذَلِكَ، وَإِنْ كَانَ بِشَرْطٍ زَائِدٍ كَالْبَيْعِ إلَى أَجَلٍ مَجْهُولٍ أَوْ بِشَرْطٍ فِيهِ نَفْعٌ لِأَحَدِهِمَا فَكَذَلِكَ عِنْدَهُمَا لِعَدَمِ اللُّزُومِ، وَعِنْدَ مُحَمَّدٍ لِمَنْ لَهُ مَنْفَعَةُ الشَّرْطِ، وَلَمْ يَشْتَرِطْ أَبُو يُوسُفَ عِلْمَ الْآخَرِ، وَاقْتَصَرَ فِي الْهِدَايَةِ عَلَى قَوْلِ مُحَمَّدٍ، وَلَمْ يَذْكُرْ خِلَافًا، (البحر الرائق ج 6 ص 102 أيج أيم سعيد)

[2] http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

This answer was collected from DarulFiqh.com, which is operated under the supervision of Mufti Faraz ibn Adam al-Mahmudi, the student of world renowned Mufti Ebrahim Desai (Hafizahullah).

Read answers with similar topics: