What is the ruling of the Shari'ah regarding insurance in all its types?
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The questioner : What is the ruling of the Shari'ah regarding insurance in all its types and its worldly rulings?
The Shaykh : May Allah protect you from all types of insurance.
The questioner : As for us, you have been generous with us by drinking tea, and then please be generous with us again as you wish...
The Shaykh : You are increasing your generosity... Thank you, may Allah reward you, but some people want to drink coffee.
The questioner : I am ready.
The Shaykh: Hehehe.
The questioner : It is the covenant between you and drinking tea, and praise be to Allah, it has happened.
The Shaykh : May Allah reward you with good.
The questioner : And peace be upon you.
The Shaykh : Insurance, my brother, if you want the truth, it is modern gambling, modern gambling. But praise be to Allah, there is still a little room for it, in that there is compulsory insurance and there is voluntary insurance. This eases the calamity for people a little. Compulsory insurance is like taxes. Taxes in the Shari'ah are the *mukus* (arbitrary levies), and they are not prescribed. They are only prescribed in one case, and this is a long discussion: if the Islamic financial system is applied in a Muslim state, and then wealth is collected from the people in the Islamic way, and then a crisis arises that the hoarded money in the Bayt al-Mal (Treasury) of the Muslims cannot handle, in this case it is prescribed to impose taxes that correspond to—do not drink with your left hand, my brother, especially since you asked about supplication: is raising the hands in it obligatory or not? This is the obligation: that you do not drink with your left hand and do not take with your left hand. So the point in this critical situation for the Muslim state is that it imposes taxes to the extent that it resolves the crisis. When the crisis is gone, the taxes are removed from existence. So we are now, unfortunately, living under earthly rulings, not heavenly ones, except for a little of these insurance systems. But most of it, praise be to Allah, is voluntary, like life insurance and house insurance, and so on. But a portion of insurance is compulsory. This compulsory part is like taxes; we pay it against our will. We bear no sin in this situation. But the one who goes to insure his car with voluntary insurance is a gambler and a partner of the gamblers. So either he wins or he loses, and in most cases it is all loss. Are you satisfied with this explanation, or should we explain it to you?
The questioner : He loses twice: in this world and in the Hereafter.
The Shaykh : Insurance companies are like banks. They stand on the shoulders of the policyholders in the company. In other words, if a person named Zayd takes a new car out of their agency and has an accident and it is completely smashed, what did he pay? The first installment. How much is the value of the first installment? It is twenty pounds, fifty, a hundred, and so on. They compensated him with fifty or a hundred thousand. Where did they get the fifty from? From their pockets, from you and so-and-so and so-and-so who are paying every year without having any accident. And these are those disbelievers and the tails of the disbelievers among the Muslims who imitate them. They do precise calculations in every country: what are the accidents that occur, and by computer calculation, the precise computer, no matter how many cars are damaged, they are, in any case, in the end, the winners. None of the owners of the accidents is a winner except at the expense of his brother's loss. One wins, one loses. Who is the winner? The one who smashed the new car and they compensated him for it. This is a profit because in exchange for what? One installment. Who is the loser? The one who has been paying an insurance fee every year for twenty years and has not had any accident. These fees have accumulated in the company from these reserves that they collect. They finished that one and gave what? A new car. And so on. This is gambling, and this is a lottery. And if they call it a charitable lottery, there is no charitable lottery in it[An-Najm 53:23].
Yes.
The Shaykh : May Allah protect you from all types of insurance.
The questioner : As for us, you have been generous with us by drinking tea, and then please be generous with us again as you wish...
The Shaykh : You are increasing your generosity... Thank you, may Allah reward you, but some people want to drink coffee.
The questioner : I am ready.
The Shaykh: Hehehe.
The questioner : It is the covenant between you and drinking tea, and praise be to Allah, it has happened.
The Shaykh : May Allah reward you with good.
The questioner : And peace be upon you.
The Shaykh : Insurance, my brother, if you want the truth, it is modern gambling, modern gambling. But praise be to Allah, there is still a little room for it, in that there is compulsory insurance and there is voluntary insurance. This eases the calamity for people a little. Compulsory insurance is like taxes. Taxes in the Shari'ah are the *mukus* (arbitrary levies), and they are not prescribed. They are only prescribed in one case, and this is a long discussion: if the Islamic financial system is applied in a Muslim state, and then wealth is collected from the people in the Islamic way, and then a crisis arises that the hoarded money in the Bayt al-Mal (Treasury) of the Muslims cannot handle, in this case it is prescribed to impose taxes that correspond to—do not drink with your left hand, my brother, especially since you asked about supplication: is raising the hands in it obligatory or not? This is the obligation: that you do not drink with your left hand and do not take with your left hand. So the point in this critical situation for the Muslim state is that it imposes taxes to the extent that it resolves the crisis. When the crisis is gone, the taxes are removed from existence. So we are now, unfortunately, living under earthly rulings, not heavenly ones, except for a little of these insurance systems. But most of it, praise be to Allah, is voluntary, like life insurance and house insurance, and so on. But a portion of insurance is compulsory. This compulsory part is like taxes; we pay it against our will. We bear no sin in this situation. But the one who goes to insure his car with voluntary insurance is a gambler and a partner of the gamblers. So either he wins or he loses, and in most cases it is all loss. Are you satisfied with this explanation, or should we explain it to you?
The questioner : He loses twice: in this world and in the Hereafter.
The Shaykh : Insurance companies are like banks. They stand on the shoulders of the policyholders in the company. In other words, if a person named Zayd takes a new car out of their agency and has an accident and it is completely smashed, what did he pay? The first installment. How much is the value of the first installment? It is twenty pounds, fifty, a hundred, and so on. They compensated him with fifty or a hundred thousand. Where did they get the fifty from? From their pockets, from you and so-and-so and so-and-so who are paying every year without having any accident. And these are those disbelievers and the tails of the disbelievers among the Muslims who imitate them. They do precise calculations in every country: what are the accidents that occur, and by computer calculation, the precise computer, no matter how many cars are damaged, they are, in any case, in the end, the winners. None of the owners of the accidents is a winner except at the expense of his brother's loss. One wins, one loses. Who is the winner? The one who smashed the new car and they compensated him for it. This is a profit because in exchange for what? One installment. Who is the loser? The one who has been paying an insurance fee every year for twenty years and has not had any accident. These fees have accumulated in the company from these reserves that they collect. They finished that one and gave what? A new car. And so on. This is gambling, and this is a lottery. And if they call it a charitable lottery, there is no charitable lottery in it
They are not but [mere] names you have named them - you and your forefathers - for which Allah has sent down no authority.
إِنْ هِيَ إِلَّا أَسْمَاءٌ سَمَّيْتُمُوهَا أَنْتُمْ وَآبَاؤُكُمْ مَا أَنْزَلَ اللَّهُ بِهَا مِنْ سُلْطَانٍYes.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.