Plz tell me why is insurance haram?

Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)


One of our brothers/sisters has asked this question:


plz tell me why is insurance haram? and what are the ways to avoid it. let me tell you my case, and please advice me what should i do. i live in the united states. i`m here on a student visa, i have to pay thousands of dollars in tuition fees. according to the law, its compulusry for all students to keep medical insurance, and universities wont allow u admission unless u have insurance.


i injured my knees so bad that i needed to undergo surgery. my expenses were around 20,000$ and all of them were covered by my insurance company. my knee still requires treatment and i might need another surgery. i dont have the money to take care of myself and the best and the least expensive way to cover my medical costs is to have health insurance. please advice. is car insurance also haram?? 


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Car and health Insurance

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Your Question: plz tell me why is insurance haram?

Dear and Beloved Brother, the concept of ‘insurance’ per say in its essence is not prohibited in Islam; it is the ‘riba’ or interest element, which is the financial back-bone of modern day conventional insurance, is what has been declared haraam and absolutely prohibited in Islam.


At the times of the Prophet Mohamed (saws) and the Rightly Guided Khalifahs, there was a system of ‘Bayt-ul-Maal’ or ‘central treasury’ of the Islamic State, which if needed, would play the role of being the insurers of its citizens….and when one amongst the citizens was burdened with a calamity or necessity which was beyond their means, the leader of the believers had the authority to relieve the person of his burdens and compensate the loss amount from the ‘bayt-ul-maal’.


Thus insurance in its essence is not what is prohibited in Islam, it is the interest element involved in modern conventional insurance which is deemed absolutely forbidden in Islam.  Alhamdolillah, today there are many Islamic Insurance companies in many Muslim Nations who provide insurance in various categories in accordance with Shariah and interest-free principles.


Your Statements: according to the law, its compulusry for all students to keep medical insurance. is car insurance also haram?? 

In places where it is mandatory by law to take health or car or any other type of insurance, the scholars and jurists in Islam are of the opinion that the believers who have no other legal option but to fulfill the requirements of the law, will at least have an excuse in the Court of Allah Subhanah for taking out the required insurance.


The majority of the scholars and jurists are of the opinion that if one knows for sure that the source of the funds received from the insurance company are interest-based, and so fears Allah that he wants absolutely nothing to do with ‘riba’ or interest, he always has the option of not raising any claims for his medical treatment or car accidents from the insurance companies; or at the very most, raise a claim equivalent only to what he has contributed towards the premium paid.  That would indeed be the safest and purest route, and the person will not be held accountable for engaging or benefiting from anything that has clearly been declared as forbidden in Islam.


Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone.  Allah Alone Knows Best and He is the Only Source of Strength.



Your brother and well wisher in Islam,





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