Q. "Is
car insurance permissible? The photo-copy of an article published in "Arab
News" is enclosed wherein it is held that car insurance is perfectly
permissible and it is not against the concept of "Tawakkul"
or "Taqdeer". Please explain whether or not this viewpoint is
correct in Shari'ah."
(Mansoor Qadri, Jeddah)
A. I have gone through the enclosed article, and I am sorry to
say that the viewpoint mentioned therin does not reflect the correct position
of insurance according to the principles of Shari'ah as recognized by
the overwhelming majority of the contemporary Jurists.
In fact, all forms of the commercial Insurance prevalent in the traditional
insurance companies are against the Islamic prin- ciples because they
have either an element of Riba or the element of qimar or gharar.
The basic cause of the impermissibility of the current methods of insurance
is not that the insurance is against the concept of Tawakkul or Taqdeer,
it is rightly mentioned in the article of "Arab News" that taking
a precautionary measure against a possible loss or seeking a safe-guard
against an accident does in no way contravene the concept of "Tawakkul"
(placing one's trust in Allah) and of "Taqdeer" (Allah's will
and destiny).
However, like any other act in this life, every measure of precaution
must conform to the principles of Shari'ah and should not in any manner
cross the limits prescribed by the Holy Qur'an and Sunnah.
It is a well settled principle of Shari'ah that every transaction between
two parties in which the payment by one party to the other is certain
and mandatory while payment by the other party depends upon a contingency
(which may or may not occur) is included in qimar and gharar and is, therefore,
unlawful.
The insurance of cars or other goods with the traditional insurance companies
is a commercial transaction in which the per- son who wants to insure
his goods is bound to pay a premium to the company in accordance with
the prescribed conditions. This payment is certain and mandatory without
which an insurance is not possible. But on the other hand, the payment
by the company is not certain. It is contingent upon an event or accident
which may or may not occur. If the accident takes place, the company is
bound to pay an amount far more higher than the amount of the premium
paid by the insured, but if the acci- dent does not take place, the company
does not pay to him anything and the premium paid by him goes without
any return. In other words, the insured is bound to pay in any cause while
the company may or may not pay. Such kind of transaction is termed as
gharar and Qimar and is strictly prohibited in Shari'ah.
Moreovar, if the accident takes place, the amount of insurance is paid
to the insured as a consideration of the amount of pre- mium. It is again
repugnant to the well-settled principle of Shari'ah that where money is
exchanged for money, both the amo- unts should be equal in quantity. Any
increase on either side is 'Riba' which is clearly prohibited by the Holy
Qur'an and Sunnah.
It is for these reasons that all the prevalent forms of commercial insurance
have been held by the majority of the contempo- rary Muslim Jurists as
prohibited. This subject has been thoroughly discussed in different international
seminars and confere- nces. Lastly, the question was also put before the
second annual session of the Islamic Fiqh Academy (established by the
OIC) in Jeddah where all the Muslim countries were represented through
their eminent scholars. After a detailed discussion of the subject, the
Academy has adopted the unanimouse resolution that the prevailing forms
of insurance are prohibited in Shari'ah. However, the Muslim countries
can develop their own system of insurance through the concept of Takaful,
Waqf etc.
However, it should be remembered that since third party insurance is a
mandatory legal requirement for every car-owner, he can effect this kind
of insurance, because it is not possible for him to avoid it.
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