What is the ruling on property insurance, where annual amounts are paid to the company, and if an accident occurs, for example to a car, the company covers its repair, and the money is not returned?
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The questioner : In the name of Allah, the Most Gracious, the Most Merciful.
What is your opinion, may Allah reward you, regarding insurance on property, specifically cars, where an annual fee is paid to this company, determined by known regulations, and the company covers the compensation for the beneficiary for any accidents that happen to this car during this specified period, noting that the company does not return any of the amount if no accident happens to the car?
The Shaykh : This is forbidden. Insurance in the manner you described, where the insured pays annual or monthly sums to the company, and then if an accident occurs, the company handles it, whether it is more or less than what the insured paid, and if no accident occurs, the company does not return what it took, is of the forbidden gambling, whose prohibition is linked to the prohibition of intoxicants and idols. Therefore, it is not permissible for a person to deal in this manner.
The questioner : They say that there are fatwas?
The Shaykh : What did they agree on?
The questioner : They say there are fatwas.
The Shaykh : Fatwas from whom?
The questioner : I do not know, but...
The Shaykh : Even the one who issued it is misguided.
The questioner : They say: We have fatwas.
The Shaykh : I say: This is an error; it is not correct. It is gambling. Allah the Exalted said:[Al-Ma'idah 5:90].
What is your opinion, may Allah reward you, regarding insurance on property, specifically cars, where an annual fee is paid to this company, determined by known regulations, and the company covers the compensation for the beneficiary for any accidents that happen to this car during this specified period, noting that the company does not return any of the amount if no accident happens to the car?
The Shaykh : This is forbidden. Insurance in the manner you described, where the insured pays annual or monthly sums to the company, and then if an accident occurs, the company handles it, whether it is more or less than what the insured paid, and if no accident occurs, the company does not return what it took, is of the forbidden gambling, whose prohibition is linked to the prohibition of intoxicants and idols. Therefore, it is not permissible for a person to deal in this manner.
The questioner : They say that there are fatwas?
The Shaykh : What did they agree on?
The questioner : They say there are fatwas.
The Shaykh : Fatwas from whom?
The questioner : I do not know, but...
The Shaykh : Even the one who issued it is misguided.
The questioner : They say: We have fatwas.
The Shaykh : I say: This is an error; it is not correct. It is gambling. Allah the Exalted said: