The Ruling on Lying to Insurance Companies
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Question:
Insurance is mandatory in this country, and one may need large sums of money. Some Muslims, may Allah guide them, use lying and fraud with insurance companies to reduce the payment they make. This lying is difficult for insurance companies to detect. What is the ruling on this action?
Answer:
Insurance is not permissible; insurance is a form of gambling and chance-taking. If it is imposed on someone by force, there is no blame on him, but he should not take more than what he paid, if he can do so out of necessity. This is because Allah, Glorified and Exalted is He, says: [Al-An'am: 119].
And if the transaction involves lying, it is not permissible. A transaction involving lying and deception is not permissible. A Muslim must beware of lying and deception. If he deals with them in a sound manner and is compelled to take out insurance, there is no blame on him due to necessity. However, if it is through lying and tricks, it is not permissible. This is manipulation. A Muslim must beware of lying and deception. But if he is compelled to do so, as in the noble verse:[Al-An'am 6:119], in insurance and other matters.
Insurance is mandatory in this country, and one may need large sums of money. Some Muslims, may Allah guide them, use lying and fraud with insurance companies to reduce the payment they make. This lying is difficult for insurance companies to detect. What is the ruling on this action?
Answer:
Insurance is not permissible; insurance is a form of gambling and chance-taking. If it is imposed on someone by force, there is no blame on him, but he should not take more than what he paid, if he can do so out of necessity. This is because Allah, Glorified and Exalted is He, says:
while He has explained in detail to you what He has forbidden you, excepting that to which you are compelled
وَقَدْ فَصَّلَ لَكُمْ مَا حَرَّمَ عَلَيْكُمْ إِلَّا مَا اضْطُرِرْتُمْ إِلَيْهِAnd if the transaction involves lying, it is not permissible. A transaction involving lying and deception is not permissible. A Muslim must beware of lying and deception. If he deals with them in a sound manner and is compelled to take out insurance, there is no blame on him due to necessity. However, if it is through lying and tricks, it is not permissible. This is manipulation. A Muslim must beware of lying and deception. But if he is compelled to do so, as in the noble verse:
while He has explained in detail to you what He has forbidden you, excepting that to which you are compelled
وَقَدْ فَصَّلَ لَكُمْ مَا حَرَّمَ عَلَيْكُمْ إِلَّا مَا اضْطُرِرْتُمْ إِلَيْهِ
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.