What is the ruling on cooperative insurance?
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The questioner : His EminenceThe Shaykh : Recently, what is known as insurance has appeared, insurance for property, trade, and cars, and companies have emerged in this field. They insure cars, meaning: if a car is involved in an accident, they guarantee its value, and if there are fatalities as a result of the accident, they pay the blood money. So what is your guidance? They call it cooperative insurance, on the basis of cooperation. What is your guidance on this? May Allah reward you with good.
The Shaykh : Based on what you mentioned, we see that this is forbidden, meaning: the car owner pays so much and so much each month, or so much and so much each year, to the company, and the company guarantees the accident resulting from this car. We see that this is forbidden, and that it is of the gambling that Allah associated with the worship of idols and the drinking of intoxicants. Allah the Exalted said:[Al-Ma'idah 5:90] The point is: if this insured person pays five hundred riyals each month, he owes six thousand riyals in the year. Perhaps an accident will occur in this year that consumes twenty thousand riyals, or perhaps nothing will happen. If the former occurs, meaning an accident happens that consumes twenty thousand riyals, the insured person, meaning the one who paid the insurance, becomes the gainer, and the company? It becomes the loser. If the opposite happens, meaning the year passes and no accident occurs, the company becomes the gainer and the insured person becomes the loser. This is exactly gambling, so it is forbidden, and it is not permissible for a person to engage in it.
And do not be deceived, O person, by the actions of people, for Allah Blessed and Exalted is He says:[Al-An'am 6:116]
So my advice to my brothers is: to boycott these insurances. As for their saying: it is cooperative insurance, this is the most false thing. Can any person who has not entered into this insurance benefit from this association? Absolutely not, he does not benefit. Rather, it is insurance containing the gambling of betting.
The Shaykh : Based on what you mentioned, we see that this is forbidden, meaning: the car owner pays so much and so much each month, or so much and so much each year, to the company, and the company guarantees the accident resulting from this car. We see that this is forbidden, and that it is of the gambling that Allah associated with the worship of idols and the drinking of intoxicants. Allah the Exalted 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 تُفْلِحُونَAnd do not be deceived, O person, by the actions of people, for Allah Blessed and Exalted is He says:
And if you obey most of those upon the earth, they will mislead you from the way of Allah
وَإِنْ تُطِعْ أَكْثَرَ مَنْ فِي الْأَرْضِ يُضِلُّوكَ عَنْ سَبِيلِ اللَّهِSo my advice to my brothers is: to boycott these insurances. As for their saying: it is cooperative insurance, this is the most false thing. Can any person who has not entered into this insurance benefit from this association? Absolutely not, he does not benefit. Rather, it is insurance containing the gambling of betting.