The money received from an insurance company as compensation for damages in the store
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The first question of Fatwa No. ( 4862 )
Q1: A fire broke out in the store of a Muslim, burning nearly all the goods inside. Since he had been insured with an insurance company for years, the company compensated him for nearly everything he lost. What is Allah’s ruling on this money received, especially since the total amount he paid to the company over all those years does not even equal half of what he received after the fire, and you know that in some countries insurance is mandatory?
A1: This type of commercial insurance is forbidden; because it contains riba (usury or interest), gharar (excessive uncertainty in a contract), ignorance, and consuming wealth unjustly. The person who suffered the loss you mentioned should take the amount corresponding to the funds he paid to the company, and give the rest in charity to the poor, or spend it in another avenue of righteousness, and withdraw from the insurance company.
Q1: A fire broke out in the store of a Muslim, burning nearly all the goods inside. Since he had been insured with an insurance company for years, the company compensated him for nearly everything he lost. What is Allah’s ruling on this money received, especially since the total amount he paid to the company over all those years does not even equal half of what he received after the fire, and you know that in some countries insurance is mandatory?
A1: This type of commercial insurance is forbidden; because it contains riba (usury or interest), gharar (excessive uncertainty in a contract), ignorance, and consuming wealth unjustly. The person who suffered the loss you mentioned should take the amount corresponding to the funds he paid to the company, and give the rest in charity to the poor, or spend it in another avenue of righteousness, and withdraw from the insurance company.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.