What is the ruling of Sharia on dealing with commercial insurance companies, be it in daily life affairs or stock trading?
Answer:
All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Commercial insurance is among the Maisr (Gambling) contracts, which are forbidden by agreement of the scholars of Sharia because they rest on the principle of gambling. In this contract, the person pays money to the insurance company to make a similar amount, or more, or less. In this regard, Allah the Almighty says (What means), " O ye who believe! Intoxicants and gambling, (dedication of) stones, and (divination by) arrows, are an abomination,- of Satan’s handwork: eschew such (abomination), that ye may prosper." {Al-Mai`dah, 90}.
Fiqh academies and the Jordan Iftaa` Council have issued successive resolutions prohibiting commercial insurance.
In conclusion, just as the expansion of the commercial insurance companies doesn`t make the lawful unlawful, the expansion of the usurious banks doesn`t make usury lawful. As a result, Allah has made cooperative insurance an alternative for commercial insurance. And Allah the Almighty knows best.