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IslamQA: What types of insurance can Muslims get?

Salaam. I wonder how do we muslims deal with matter of insurance? We need to be insured incase of any damage to our expensive belognings such as house etc , or any illness/accident. So its hard to reject it

Alaikumassalam wa rahmatullah,

If we are legally required to get non-halal insurance, for example in order to be able to drive a car, then we can do it.

As for the general question of insurance, Islam has its own insurance system that is greatly superior to ordinary, Western-style insurance, in that it is non-profit-making and non-usurious.

In the Western insurance system companies try to charge as high a price as they can get away with for as bad a service as they can get away with. They, similar to banks, are like paradises on society that constantly seek out new ways of extracting money from people. The Islamic insurance system removes this parasitical tendency by making the customers the shareholders in the company, by forbidding profit, and by forbidding usurious re-investment. This means that the insurance system in Islam acts as a social safety net upheld by the rest of the customers, without anyone wanting to enrich themselves by other people’s misfortunes as is the case with Western insurance.

There are no established Islamic insurance companies in the West as far as I know. As I said, if the law requires that one get insurance in order to be able to do something, such as driving cars or practicing medicine, then Muslims can use ordinary insurance. But when it comes to matters of choice, such as home insurance, then the pious thing to do is not get insurance and accept the risk until there is a viable Islamic alternative. If some Muslim thinks this is too great a risk then they can get insurance in these things and accept the moral responsibility, perhaps God will accept their excuses.

For more on how the Western financial system is designed to make the rich richer at everyone else’s expense, and how it can be fixed, please see my free ebook A Short Introduction to Usury.

And God knows best.
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