Takaful : car liability insurance

Fatawa Question

Assalamu Alaikum Dr Monzer Kahf. Your email address was passed on to me in the hope that you may be able to help me to better understand an issue, which I'm totally confused and worried about. Earlier on this year I found out that all forms of insurance are Haram, as there is the element of risk and ambiguity which equates to a kind of gambling. My question is specifically about car insurance. The general scholarly opinion is that if one is in a land where they are forced by law to take out car insurance (as in the UK where I live), it is permissible to take it out provided they take out what is compulsory by law and not go for the optional ones like third party fire and theft or comprehensive cover. This is from how I understand it and from what I've read. I realize that some time ago, third party cover in the UK was cheaper to buy than fully comprehensive, but that's all changed now ! For some strange reason fully comprehensive is far cheaper to buy than third party, so if that's the case, then Islamically should I still go for the third party over the fully comp ? Because third party is mandatory in the UK as a minimum and a legal requirement even though it's more expensive ? The thing is, if I did go for the fully comprehensive cover and ended up paying say 50 % less than I would do with third party cover and am not involved in any accident (InSha Allah), I.e. do not end up using the fully comp features or claiming in any way during the insurance year, then surely that would mean I would have come out better than if I were to have paid more for third party under the same situation I.e. do not claim or end up using the third party features, which in itself contains less features and benefits. Third party car insurance is becoming far more expensive although it offers less and fully comp cover provides the insured far more benefits and features although it's far cheaper ! This doesn't make sense. Can you see what these insurance companies are doing ? They appear to be making things more difficult for Muslims to take out the bare minimum car insurance and would rather have them buy their optional cover such as Fully Comprehensive. Surely this is a fault, surely ? With this situation becoming what it is Dr Kahf, what should I do Islamically ? Do I still have to go for the third party as it's the legal requirement minimum despite it being more expensive, or should I take out fully comprehensive with the reasoning that I would be paying less money to the insurer, but having the potential to claim more and receive more benefits and features ? I really am scared of committing Haram and have no real knowledge of Islam as such. I've done too many Haram things in my life I just want to change and for Allah to love me, so I am trying to change my ways and become a better Muslim InSha’Allah. I think a lot of people end up becoming confused when it comes to understanding the ins and outs of the realm of insurance, as it is quite a complicated business, well I think so anyway. I'm so confused I haven't the faintest idea as to where to begin Dr. Kahf. I passed my driving test on the 4th of January this year and bought my car before then on the 4th of September 2010, and it was when I bought my car that I took out car insurance at the fully comprehensive cover. That was roughly on the 6th of Sep 2010, so it's up for renewal soon. I have received lots of car insurance quotes both for third party and for fully comprehensive and I can tell you that fully comp come up on top as being far cheaper. Should I get for third party no matter how much it comes and despite it being more expensive than fully comp ? Please advise me if you can Insha’Allah or direct me to a source that could clarify the matter. I would appreciate so much Dr Kahf and thank you kindly for you time. May Allah the exalted reward you with his blessings and peace. Salaam. Basil

Fatwa

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Publication Date

2011-08-29

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Insurance
• Vehicles

No. of Pages

3

Data Type

Fatawa

Language

English

Record ID

BIM-729466

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