Is it Permissible to use the Insurance Payout?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Apart from any insurance (third party) which is a legal requirement, it is not permissible to take out any car insurance policy. These schemes contain elements of interest [Riba], gambling [Qimar] and deception [Gharar].

If you are paid out, you may only use the sum of your premiums and not more than that.[i] The excess amount should be disposed in charity without the intention of reward.[ii]

And Allah Ta’āla Knows Best

Imran Patel

Student Darul Iftaa

Zambia

Checked and Approved by,
Mufti Ebrahim Desai.

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