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What Kind of Car Insurance Should One Take Bearing in Mind It Is Haraam?

Answered by: Shaykh Ahmed Bin Mohamed Umarji

Question:

I have a brother who is asking about “car insurance”. He knows that insurance is haram but he is asking what type of coverage he should take.

1) Additional Third Party Liability Coverage – While the legal minimum insurance requires $200,000 of third party liability coverage, many drivers pay for extra coverage up to $2 million so they’re covered in case someone else is injured or killed, or an accident causes property damage.

2) Additional Statutory Accident Benefits – The Mandatory Accident Benefits coverage provides replacement income, however, only up to a point. The minimum coverage offers just 70 per cent income replacement of your gross income capped at $400 a week. Many people choose to add on to the minimum requirements, including purchasing additional coverage for medical costs, attendant care, housekeeping benefits, and funeral costs.

Basically, he wants to know how to purchase car insurance but not exceed the limits of Sharia.

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

Insurance in itself is impermissible.1 However since the law mandates that one buys insurance it will be permissible.2 Either package is permissible in this case.

Only Allah knows best

Written by Shaykh Ahmed Bin Mohamed Umarji

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

1 Fatawa Darul Uloom Zakariyya, Volume 5 , Page 449 , Zam Zam Publishers

2 Fatawa Darul Uloom Zakariyya, Volume 5 , Page 454 , Zam Zam Publishers

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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