The Lawfulness of the Insurance Contract in Light of Islamic Sacred Law
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Fatwa No. ( 5918 )
Q: The modern insurance contract that has spread to us from the Western countries, and has become widespread in our lands, and whose practice has been adopted by a large group of Muslims, with companies established for it and offices opened, and many Muslim merchants and owners of businesses and trades have engaged in it; to guarantee their imported goods, and to compensate for their prices if they are destroyed or stolen, or for what happens in construction works and factories
and workers, such as collapse, loss, killing, or harm, or for what happens to cars in terms of collision, theft, or damage, or for what occurs in digging wells and opening mines in terms of collapse, to escape financial liability, or for the life of the insured himself, hoping for compensation for his heirs if he dies.. or other numerous and abundant matters. They have codified it and set its limits and conditions, and arranged for it annual financial installments, which the insured pays to the company that organizes the insurance contract for him according to its established laws. The governments have adopted it and considered its laws, so we ask for an answer to this question regarding the lawfulness of the insurance contract in light of Islamic sacred law, and the ruling on working with these companies.
A: Insurance in all its types is forbidden and prohibited; because it contains ignorance and excessive uncertainty - which are not excused - and gambling, and consuming wealth unjustly, and usury or interest, and all of this has been indicated by the texts to be forbidden. Allah the Exalted said:[Al-Baqarah 2:188] And Allah the Exalted said: [Al-Ma'idah 5:91]
And the Prophet (peace and blessings be upon him)Sunan Abi Dawud 3376Sahih (Al-Albani) Likewise, it is not permissible to work for insurance companies; because it involves assisting them in sin.
Q: The modern insurance contract that has spread to us from the Western countries, and has become widespread in our lands, and whose practice has been adopted by a large group of Muslims, with companies established for it and offices opened, and many Muslim merchants and owners of businesses and trades have engaged in it; to guarantee their imported goods, and to compensate for their prices if they are destroyed or stolen, or for what happens in construction works and factories
and workers, such as collapse, loss, killing, or harm, or for what happens to cars in terms of collision, theft, or damage, or for what occurs in digging wells and opening mines in terms of collapse, to escape financial liability, or for the life of the insured himself, hoping for compensation for his heirs if he dies.. or other numerous and abundant matters. They have codified it and set its limits and conditions, and arranged for it annual financial installments, which the insured pays to the company that organizes the insurance contract for him according to its established laws. The governments have adopted it and considered its laws, so we ask for an answer to this question regarding the lawfulness of the insurance contract in light of Islamic sacred law, and the ruling on working with these companies.
A: Insurance in all its types is forbidden and prohibited; because it contains ignorance and excessive uncertainty - which are not excused - and gambling, and consuming wealth unjustly, and usury or interest, and all of this has been indicated by the texts to be forbidden. Allah the Exalted said:
And do not consume one another's wealth unjustly
وَلاَ تَأْكُلُوا أَمْوَالَكُمْ بَيْنَكُمْ بِالْبَاطِلِSatan only wants to cause between you animosity and hatred through intoxicants and gambling and to avert you from the remembrance of Allah and from prayer. So will you not desist?
إِنَّمَا يُرِيدُ الشَّيْطَانُ أَنْ يُوقِعَ بَيْنَكُمُ الْعَدَاوَةَ وَالْبَغْضَاءَ فِي الْخَمْرِ وَالْمَيْسِرِ وَيَصُدَّكُمْ عَنْ ذِكْرِ اللَّهِ وَعَنِ الصَّلاَةِ فَهَلْ أَنْتُمْ مُنْتَهُونَAnd the Prophet (peace and blessings be upon him)
forbade the type of sale which involves risk (or uncertainty)
نهى عن بيع الغرر،
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.