What is the ruling on insurance for a driver's license?
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The questioner : He says: This is about insurance, O honorable Shaykh. I hope that if it is lawful, you will advise us to take it, or warn us against it. The advertisement says: "Be at ease while driving your private car. We will cover you for up to three million riyals in exchange for one riyal per day, because you are exposed to a car accident at any time, and because circumstances may force you to use a car that may or may not be yours. The Cooperative Insurance Company has developed a special license insurance policy to protect you from this risk. It is an insurance policy on the driving license, not on the car you are driving. We cover your liability toward others for any injury or loss to their property, up to an amount of three million riyals. And to make the policy accessible to everyone, we have made the subscription fee affordable; it costs only one riyal per day, that is: three hundred and sixty-five riyals per year. In return, you can drive any private car with peace of mind and a tranquil heart."
The Shaykh : I did not understand the insurance on...
The questioner : Every day they take one riyal from you, and if an accident happens, they say they are ready to cover costs reaching three million riyals, God forbid, if you run over someone.
The Shaykh : But why did they switch from insuring the car to insuring the license, except to deceive people? I say that this insurance and its like are forbidden (haram). No one who knows the sources and resources of the Shari'ah doubts that it is gambling (maysir), which Allah the Exalted linked with intoxicants, sacrificial stones, and arrow lots. He said:[Al-Ma'idah 5:90] The reason it is gambling is that if you pay one riyal every day, how much do you pay in a year? As he said: three hundred and sixty-five, based on the assumption that the year is a solar year. As for the lunar Hijri year, it is less than that; you will pay three hundred and fifty riyals in the year. Then an accident may happen to you that covers one hundred thousand, so the company is what? A loser, and you are a winner. Or perhaps the year passes and no accident happens to you, so you are the loser.
Therefore, I say: We ask Allah to spare us from this affliction. Usury (riba) has become widespread among the Muslims, either explicitly or through a scheme.
Do these people want us to also increase gambling, betting, and wagering among us? We ask Allah the Exalted to protect us from the evil of our evildoers.
I say: This insurance and its like are forbidden (haram). The rule is: "Every contract that entails the possibility of profit and loss between the contracting parties is gambling (maysir)". We say: Every contracting party is either a winner or a loser by virtue of the contract, not by virtue of price fluctuations. Otherwise, it is known that if I buy a commodity for one hundred riyals and then bring it to the market and do not sell it except for eighty, that is a loss, but not because of the contract. For this reason, some people said: "Everything is exposed to profit and loss." It is said: The profit and loss in gambling (maysir) is by virtue of what? The contract. As for profit and loss by virtue of the market and prices, that is outside the contract. Yes.
The questioner : ...
The Shaykh : People of Bahrain
The questioner : Yes, O Shaykh
The Shaykh : Do you have questions today?
The questioner : Yes, my Shaykh
The Shaykh : Please proceed.
The Shaykh : I did not understand the insurance on...
The questioner : Every day they take one riyal from you, and if an accident happens, they say they are ready to cover costs reaching three million riyals, God forbid, if you run over someone.
The Shaykh : But why did they switch from insuring the car to insuring the license, except to deceive people? I say that this insurance and its like are forbidden (haram). No one who knows the sources and resources of the Shari'ah doubts that it is gambling (maysir), which Allah the Exalted linked with intoxicants, sacrificial stones, and arrow lots. He said:
O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone alters [to other than Allah], and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful.
يَا أَيُّهَا الَّذِينَ آمَنُوا إِنَّمَا الْخَمْرُ وَالْمَيْسِرُ وَالْأَنْصَابُ وَالْأَزْلامُ رِجْسٌ مِنْ عَمَلِ الشَّيْطَانِ فَاجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَTherefore, I say: We ask Allah to spare us from this affliction. Usury (riba) has become widespread among the Muslims, either explicitly or through a scheme.
Do these people want us to also increase gambling, betting, and wagering among us? We ask Allah the Exalted to protect us from the evil of our evildoers.
I say: This insurance and its like are forbidden (haram). The rule is: "Every contract that entails the possibility of profit and loss between the contracting parties is gambling (maysir)". We say: Every contracting party is either a winner or a loser by virtue of the contract, not by virtue of price fluctuations. Otherwise, it is known that if I buy a commodity for one hundred riyals and then bring it to the market and do not sell it except for eighty, that is a loss, but not because of the contract. For this reason, some people said: "Everything is exposed to profit and loss." It is said: The profit and loss in gambling (maysir) is by virtue of what? The contract. As for profit and loss by virtue of the market and prices, that is outside the contract. Yes.
The questioner : ...
The Shaykh : People of Bahrain
The questioner : Yes, O Shaykh
The Shaykh : Do you have questions today?
The questioner : Yes, my Shaykh
The Shaykh : Please proceed.