Q: I live in Zimbabwe.
1. Is full comprehensive insurance for motor vehicles allowed?
2. Am I allowed to use an insurance broker that is Muslim owned for licencing and insurance of my vehicle?
A: 1 & 2. Insurance is haraam in Islam due to the elements of interest and gambling being found in it. One is uncertain as to whether one will be hijacked or meet in an accident or one’s house or business will be burgled in the future or not. Any transaction wherein one pays for something which is suspended upon an uncertain event is in actual fact gambling. This is the definition of gambling according to all the Ulama. In the case of gambling, one spends a certain amount of money in the hope of gaining something which is uncertain. One might lose all one’s money and get nothing or one might get something more or less than what one had spent. Hence we see the element of gambling found in an insurance policy. Further, if one receives the insurance payout and one is paid more than the amount one had paid to the insurance company, then in this case the extra amount one has received is riba (interest). Hence taking out an insurance policy is impermissible in Shari’ah.
And Allah Ta’ala (الله تعالى) knows best.
Mufti Zakaria Makada
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)