Fatwa No : 80972
The ruling on transactions with an insurance company

The ruling on transactions with an insurance company

What do the esteemed Islamic scholars say regarding this issue that I purchased a motorcycle on an installment plan for a total price of 59,000 rupees. The installment seller informed me that if the motorcycle were to be stolen, the condition would be that I must pay 2,500 rupees for registration in my name and 3,500 rupees for insurance. Additionally, for the use of the motorcycle over approximately four to five months, I would be required to pay 6,000 rupees. Only after making these payments would, I be eligible to receive a new motorcycle. I paid an advance of 12,000 rupees and four installments, bringing the total paid amount to 26,000 rupees. The seller also stated that if I chose not to take the motorcycle, these 26,000 rupees would not be refunded. Now, I am required to take a new motorcycle without insurance, for which I must pay a 12,000 rupee advance along with 33,000 rupees, an amount considered as payment toward the previous motorcycle.
Is it permissible to take the new motorcycle in exchange for this payment of 33,000 rupees?

الجوابُ حامِدا ًو مُصلیِّا ً

The dealings of conventional insurance companies generally involve interest (riba), gambling (qimar), and excessive uncertainty (gharar); therefore, it is necessary to avoid them. However, if the transaction is carried out not with an insurance company but with a takaful (Islamic insurance) company in accordance with Islamic principles, or if the purchase is made purely on an installment basis or as a cash transaction without involving insurance, then this is preferable even if the amount to be paid is slightly more or less.
However, if there is any doubt or uncertainty about conducting the transaction in this manner, then it is advisable to seek a clear Islamic ruling after clarification.

مأخَذُ الفَتوی

قال للہ تعالیٰ: ﴿وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا﴾ (البقرة: 275)۔
وفي أحكام القرآن للجصاص: وقال عثمان وجماعة من الصحابة والتابعين النرد وقال قوم من أهل العلم القمار كله من الميسر (إلی قوله) وحقيقته تمليك المال على المخاطرة وهو أصل في بطلان عقود التمليكات الواقعة على الأخطار اھ (4/ 127)-