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Insurance and Renting

Answered by Shaykh Abdul-Rahim Reasat

Question: Assalamu alaykum

I own a property which I want to pay a lettings agent to fully manage for me. For 10% of the monthy rental income, they will do the tenant finding, rent collection and handle all dealings with the tenant. Within this “fully managed package” is the option to pay an extra 4% per month for the Agent to deal with any tenant evictions that arise, covering all legal costs and rent guarantee for a fixed number of months. If I select this rent/legal cover option, then I will be “noted as an interested party in the Agent’s insurance policy”.

With this 4%, am I in effect buying a haram insurance policy or a comprehensive service package from the Agent? What would be the ruling according to the different schools of thought?

Answer: Wa ‘alaykum assalam wa rahmatullah wa barakatuh

I pray you are well.

It is permissible for you to enter into this agreement with the estate agent if you wish. If effect, you are paying them for a service which is clearly delineated. That is your agreement with them, and it does not contain anything impermissible.

The means they may employ to fund the service from their end does not concern you. Therefore, seeing as you are not directly entering into a interest based contract, it would be permissible for you use this service. Please ensure that all the variables are clear to you before progressing, and that there are no hidden charges, etc, or potential alterations which could lead to a dispute later. (Usmani, Fiqh al Buyu’)

I’m unable to provide you with positions from other schools of law. This is the answer I have understood from the Hanafi school, and through consultation with a senior scholar. Allah knows best.

May Allah grant you the best of both worlds.

Wassalam,
[Shaykh] Abdul-Rahim Reasat

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History he moved to Damascus in 2007 to study and sit at the feet of some of the most erudite scholars of our time.

Over the following eighteen months he studied a traditional curriculum, studying with scholars such as Shaykh Adnan Darwish, Shaykh Abdurrahman Arjan, Shaykh Hussain Darwish and Shaykh Muhammad Darwish.

In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years, in Fiqh, Usul al-Fiqh, Theology, Hadith Methodology and Commentary, Shama’il, and Logic with teachers such as Dr Ashraf Muneeb, Dr Salah Abu’l-Hajj, Dr Hamza al-Bakri, Shaykh Ahmad Hasanat, Dr Mansur Abu Zina amongst others. He was also given two licences of mastery in the science of Qur’anic recital by Shakh Samir Jabr and Shaykh Yahya Qandil.

His true passion, however, arose in the presence of Shaykh Ali Hani, considered by many to be one of the foremost tafsir scholars of our time who provided him with the keys to the vast knowledge of the Quran. With Shaykh Ali, he was able to study an extensive curriculum of Qur’anic Sciences, Tafsir, Arabic Grammar, and Rhetoric.

When he finally left Jordan for the UK in 2014, Shaykh Ali gave him his distinct blessing and still recommends students in the UK to seek out Shaykh Abdul-Rahim for Quranic studies. Since his return he has trained as a therapist and has helped a number of people overcome emotional and psychosomatic issues. He is a keen promoter of emotional and mental health.

Can I Purchase an Insurance When Renting a Truck?

Answered by Shaykh Umer Mian

Question: Assalamu alaykum

I’m in the process of moving and will be renting out a moving truck shortly. The company has an option to purchase insurance so any potential damage to the moving truck can be waived.

Can you please let me know if getting an insurance for a moving truck would be okay based on the overwhelming hardship? I am not experienced in driving a large truck.

I feel this insurance will still be impermissible.

Answer: Wa alaikum as-salam wa rahmatullahi wa barakatuhu

You are correct that this form of insurance, like most all forms of commercial insurance prevalent today, is impermissible. For more detailed explanation, please see the articles below by Mufti Muhammad ibn Adam (may Allah preserve him).

1) Islam’s Position on Prevelant Forms of Insurance

2) Car Rental Insurance

3) Car Damage and Insurance Issues

Regarding your reference to “overwhelming hardship,” this question has been answered in article three cited above. Although you should read the entire article for full context and detailed explanation, the most relevant portion of the answer is as follows:
“…merely the fear of not being able to pay the full compensation will not legitimize something that is categorically unlawful such as insurance. Even if one was to take ‘the lesser of two evils’ it would have to be taking the risk of causing damage rather than insurance, for the former is something that is probable whilst the latter is unlawful for certain. Thus, insurance will not become permissible on grounds that one may cause excessive damage to another person’s car and not be able to pay for the damages.”

In addition, regarding car/truck rental, the following is stated in article two cited above:
“…the best way to avail from this type of insurance is that one stipulates in agreement with the company that the insurance paid be included in the rental fee for the car, and any damages to the car is considered to be excused by the car company. In this way, it seems that this type of insurance (where the car is in sole ownership of the company) be permissible.”

Therefore, if you are able to find a truck rental company that offers insurance coverage included in the rental fee, this would be a way out, in sha Allah. In the U.S., one moving company that offers such a service is Upack. Catastrophic coverage and limited carrier negligence coverage is included in the rental fee for their moving trailers, and they offer rates competitive with truck rental companies.

And Allah knows best.

Wassalam,
[Shaykh] Umer Mian

Can I Work for an IT Company That Deals With Insurance Companies?

Answered by Ustadh Salman Younas

Question: Assalam aleykum

What is the ruling on working as a maintenance engineer for one of the IT companies that deal with some of the insurance companies, where the company sells equipments to these insurance companies, and as a maintenance engineers, we are providing IT services to these companies on a regular basis?

Answer: assalamu alaykum

This work is permissible as there is no direct engagement or assistance in sin. Rather, your job of maintaining these systems is in itself a permissible line of work.

For more, see this.

[Ustadh] Salman Younas

Checked and approved by Shaykh Faraz Rabbani

Ustadh Salman Younas  graduated from Stony Brook University with a degree in Political Science and Religious Studies. After studying the Islamic sciences online and with local scholars in New York, Ustadh Salman moved to Amman where he spent five years studying Islamic law, legal methodology, belief, hadith methodology, logic, Arabic, and tafsir. He is currently a PhD candidate at the University of Oxford and continues his traditional studies with scholars in the United Kingdom.

[cwa id=’cta’]

Is It Permissible to Work in the Call Centre Section of an Insurance Broker?

Answered by Ustadh Salman Younas

Question: Assalam aleykum

Is it permissible to work in the call centre section of an insurance broker? Or any other section of the company?

Answer: assalamu alaykum

It would be permitted to take on a job provided that: (a) the work itself is permitted and (b) the income that one receives is from a permitted source.

If your job at the call centre does not involve directly dealing with interest or directing people to buy insurance policies, it would be permitted. Otherwise, it would not be because insurance is not permitted as detailed here.

Further, even if the job is permitted, if your salary is coming from profits earned largely through the insurance services of the company, it would not be permitted to work for them. However, if the company has permissible avenues of income generation, then you may take a salary from them.

Overall, it is best to avoid such lines of work as they inevitably involve dealing with the impermissible.

[Ustadh] Salman Younas

Checked and approved by Shaykh Faraz Rabbani

Ustadh Salman Younas graduated from Stony Brook University with a degree in Political Science and Religious Studies. After studying the Islamic sciences online and with local scholars in New York, Ustadh Salman moved to Amman. There he studies Islamic law, legal methodology, belief, hadith methodology, logic, Arabic, and tafsir.

Is Emergency Roadside Service Coverage Permissible?

Answered by Shaykh Umer Mian

Question: As Salam Alaykum,

Is it permissible to purchase emergency roadside service coverage subscriptions?

These require a customer to pay a fixed amount per year as part of a yearly membership/subscription. In return, the company provides emergency roadside assistance.

Answer: Wa alaikum as-salam wa rahmatullahi wa barakatuhu.

Subscription to an emergency roadside assistance plan is not similar to insurance contracts. The former is a valid and permissible service contract, while the latter represents a form of riba (interest) and qimar (chancing). For more details, please see this answer by Shaykh Muhammad ibn Adam al-Kawthari.

Wassalam,
Umer Mian

Photo: Kgbo

Are Cover Plan Contracts Permissible?

Answered by Mufti Muhammad ibn Adam al-Kawthari

Question: I understand that the insurance contract generally is unlawful. My question is related to “cover plan” contracts.

The first plan is the road recovery services offered by AA, RAC. A fixed premium is paid per year and any issues related to your car can be fixed by the company on call out. Is it permissible?

The second plan is related to cover taken with a company that says that on paying a fixed amount per year one can call them out to fix an appliance. Is it permissible?

Answer: In the Name of Allah, Most Compassionate, Most Merciful,

To become a member of AA or RAC or any other company for the breakdown of the car is permissible and is not similar to insurance.

The reason that insurance is unlawful has been explained at length in past answers.

The case, however, with car membership is not the same. When one becomes a member, one pays for the service which the company offers him, which is to be at his assistance at any time. The money which is being paid is for the service. This is the reason why the company does not pay for any damages to the car. If you are short of fuel they will bring the fuel for you, but you will have to pay for it. If one does not use their service during the course of the year, then the payment still remains, as one is paying for the service of them being there for you at any time.

And Allah Knows Best

Muhammad ibn Adam al-Kawthari, UK

Photo: Elf

Can I Invest in a Life Insurance?

Answered by Ustadh Salman Younas

Question: Is it permitted to invest in life Insurance? What if the Insurance company says it doesn’t lend money to banks to give others as loans? The Insurance company says they invest in real estate land properties only, and do not invest on any buildings which promote gambling or liquor sales etc. So is investing in such a company permitted in Islam?

Answer: assalamu `alaykum

The default legal ruling of conventional insurance is that it is impermissible due to its incorporating elements of interest and chance, both of which are prohibited in the Qur’an. This is nearly a consensus position among scholars.

Since one of the conditions for investing in a company is that the main activity of the company be permissible, it would not be permitted to invest in an insurance company even if some of its own investments are in permitted lines of work, such as real estate.

Please see: Are Conventional Insurances Really Impermissible?

Salman

Checked & Approved by Shaykh Faraz Rabbani

Can I Take an Insurance When It Is Illegal to Not Have One?

Answered by Ustadh Salman Younas

Question: 1. In Saudi if you hit a car and the other car gets damaged you have to pay thousands of dollars if you don’t have insurance. Further, you will be in Jail till you pay back money. How is a poor person to pay such money? What other choice does he have but to take out insurance?

2. My company sent me a job contract saying you and your family’s medical is covered. Will I be sinful if I use this insurance? Considering the medical is so expensive here what options do I have?

Answer: assalamu `alaykum

The default legal ruling of conventional insurance is that it is impermissible due to its incorporating elements of interest and chance, both of which are prohibited in the Qur’an.

There are, however, two exceptions to the above rule:

(a) In cases where the law of the land deems it a requirement to have insurance in order to use a certain commodity, such as a car, and
(b) In cases where there would be clear hardship in not having insurance.

In both the above cases, it would be permitted to take out insurance to fulfill the legal requirement and to the extent required to lift any potential hardship arising as a result of not being insured. Anything beyond these limits would remain on the basic rule of impermissibility. This is the opinion held by scholars such as Mufti Saeed Palanpuri, Shaykh Ali Qurra Daghi, and others.

Therefore, it would be permissible to take out car insurance and medical insurance in the specific situation that you describe since doing otherwise will result in clear hardship.

However, I would advise you to also consult local scholars on your situation as they may be aware of permissible alternatives and the details surrounding the law in Saudi Arabia

Salman

Checked & Approved by Shaykh Faraz Rabbani

Are Conventional Insurances Really Impermissible?

Answered by Ustadh Salman Younas

Question: As far as I know, conventional insurances are impermissible and hence common things like home, life, car, medical, and travel insurance are all impermissible. But Shaykh Mustafa Zarqaa states that all insurance is halal.

Are conventional insurances really impermissible?

Answer: assalamu `alaykum

The default legal ruling of conventional insurance is that it is impermissible due to its incorporating elements of interest and chance, both of which are prohibited in the Qur’an.

There are, however, two exceptions to the above rule:

(a) In cases where the law of the land makes it a requirement to have insurance in order to use a certain commodity, such as a car, and
(b) In cases where there would be clear and overwhelming hardship in not having insurance, such as medical insurance in America.

In both the above cases, it would be permitted to take out insurance to fulfill the legal requirement and to the extent required to lift any potential hardship arising as a result of not being insured. Anything beyond these limits would remain on the basic rule of impermissibility. This is the opinion held by scholars such as Mufti Saeed Palanpuri, Shaykh Ali Qurra Daghi, and others.

Here, you should note that the types of insurance that may become permissible as a result of the two considerations above will likely differ from region to region. Thus, while medical insurance is a necessity in America, it is not the same case in Britain.

Finally, it is true that Shaykh Mustafa Zarqa allowed conventional forms of insurance. As a leading scholar of his generation, we respect his right to formulate legal opinions, but we are unable to present it as a followable position in light of the fact that the vast majority of scholars clearly rejected such an opinion on principled grounds.

Salman

Checked and Approved by Shaykh Faraz Rabbani

Is It Permissible to Work as a Medical Insurance Coder?

Answered by Ustadh Salman Younas

Question: I was looking into working from home as a medical coder. The job would require me to take the diagnosis and procedures preformed by the doctor and convert them into codes for insurance purposes. Is this halal, since the coding job will be done to get payment from the medical insurances companies?

Answer: assalamu `alaykum

From what I understand from the description of a clinical coder or a medical insurance coder, the job itself is permissible. This is because the actual work such an individual does consists of entering patient information into classification systems software in order for a health care provider to determine whether they will be reimbursed by the patients insurance company.

This task of the coder is in and of itself permissible and is therefore not considered directly assisting in sin as the clinical coder is in no way drawing up the insurance contract, evidencing it, or working directly with the actual insurance company.

However, though the income from such a job would be permissible, there may be some dislikedness in the work itself as it could be deemed indirectly assisting someone in sin. As such, it is optimal to avoid if one can do so without putting oneself in hardship. Otherwise, simply dislike it slightly in one’s heart.

Also see: Is It Considered Assisting in Sin to Develop Software for Casinos, Banks, or Insurance Companies?

Salman

Checked & Approved by Faraz Rabbani