Adam asked 10 months ago
Note: This question is a follow up to Does insurance contain interest? | Tawheed Center – Farmington Hills
JazakAllah khair for your response,
If I was to get property insurance where I would pay an insurance company a yearly fee and then in return if my house was to have fire damage they would then arrange contractors to come and repair/rebuild the property, I would never receive the money into my account. However the insurance company would be be compensating me as they would be paying the contractors and getting my property repaired.
Also if I was to make a claim I would have to pay an excess fee of anything from £50-£1000
Would this contract itself contain riba?
Question 2-
If the insurance company’s intention was to pay the building company money on behalf of myself.
Would that then mean the contract would contain riba?
Mufti Wahaaj Staff answered 10 months ago
بسم الله الرحمٰن الرحيم
الجواب حامداً ومصلياً
As-salāmu ʿalaykum wa-raḥmatullāhi wa-barakātuh.
First, I apologize for the delay in answering this question. Things became very busy during Ramaḍān.
In both scenarios, you have essentially contracted a company to be “on call” to handle issues that may occur to your property. In return for a fee paid to them, they agree to repair your property if and when the need arises. The fact that they are subcontracting the job to others by hiring them to perform the repairs is a transaction that is permissible, and at the same time, unrelated to you.[1] The amount of money paid by the insurance company to the ones repairing the house has no bearing on the permissibility of your contract, regardless of whether the insurance company paid them more or less that what you have paid them. Since you are not receiving any money back, there is not interest.
As for your premium being raised if you make a claim, it is permissible due to having becoming an industry norm.[2]
Based on the above, both scenarios that you enquired about are permissible.
If you would like to learn more about some types of insurance and the scope of permissibility in America, please refer to the following resolution by the American Fiqh Academy: Auto Insurance, AAA Membership, and the Expanded Scope of Service-Based Employment – American Fiqh Academy. While the resolution is about auto insurance, the concepts explained in the article can help deepen your understanding of property insurance as it relates to the two concerns you enquired about.
والله تعالى أعلم وعلمه أتم وبه التوفيق
And Allāh Taʿālā Knows Best
Muftī Mohammed Wahaajuddin bin Salauddin
(May Allāh forgive him and his parents)
—
المحيط البرهاني، كتاب الإجارة، الفصل الثامن والعشرون: ج١٢ ص٤٠؛ إدارة القرآن
المعقود عليه في حق الأجير الوحد تسليم النفس في مدة عمل أو لم يعمل والأجر في حقه بمقابلة تسليم النفس لا بمقابلة العمل وإذا لم يكن الأجر في حقه بمقابلة العمل كان معينا في حق العمل فلا يستحق عليه عمل سليم
المحيط البرهاني، كتاب الإجارة، الفصل العاشر، ج١١ ص٢٩٧؛ إدارة القرآن
وإذا دفع الظئر الصبي إلى خادمتها حتى أرضعته فلها الأجر كملا استحسانا لأنه لم يشترط عليها الإرضاع بنفسها
رد المحتار، كتاب الإجارة، ج٦ ص١٨، سعيد
في الدر المختار: (وإذا شرط عمله بنفسه) بأن يقول له اعمل بنفسك أو بيدك (لا يستعمل غيره إلا الظئر فلها استعمال غيرها) بشرط وغيره خلاصة (وإن أطلق كان له) أي للأجير أن يستأجر غيره
وفي الشامية: (قوله وإن أطلق) بأن لم يقيده بيده وقال خط هذا الثوب لي أو اصبغه بدرهم مثلا؛ لأنه بالإطلاق رضي بوجود عمل غيره
بدائع الصنائع، كتاب البيوع، ج٥ ص١٧٢، سعيد
إن كان مما لا يقتضيه العقد ولا يلائم العقد أيضا لكن للناس فيه تعامل فالبيع جائز كما إذا اشترى نعلا على أن يحدوه البائع أو جرابا على أن يخرزه له خفا أو ينعل خف