Fatwa on Car Insurance in Islam [Updated]

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Hi all readers! Are you looking for an explanation of the fatwa on car insurance in Islam? If your answer is “Yes”, congratulations! Now you are reading the right article. Why? Because that is what I will explain in this article. As a Muslim, you have to understand that. That’s why I wrote this article. So, you should read it to the end!

Specifically, there are some important points about the fatwa on car insurance in Islam which I will explain in this article. Some important things I mean are as follows:

A. Car Insurance in Islam: Basic Things You Must Understand.
B. Benefits of Car Insurance in Islam.
C. 5 Fatwa on Car Insurance in Islam.

Car Insurance in Islam: Basic Things You Must Understand

The important thing about the fatwa on car insurance in Islam which I will explain now is “car insurance in Islam: basic things you must understand”. I want you to understand that first before you read more explanations in this article because that is one of the basic things in this discussion that must be well understood.

Car insurance is one type of insurance that is used to protect against the impact of financial losses or loss of income of a person or family due to broken car.

In simple terms, car insurance is a type of insurance that aims to cover a person or family against unexpected financial losses due to the policyholder’s illness.

In Islam, according to some Islamic jurists, car insurance funds must be managed according to Islamic rules.

The main difference between car insurance in Islam and conventional car insurance lies in the basic concepts and ways of managing funds in accordance with Islamic principles. Car insurance in Islam is insurance based on the principle of mutual help and protection among participants through contributions to the Tabarru Fund, which is a collection of benevolent funds from the contributions of shariah car insurance participants who agree to help each other if there is a risk between them. These funds are then managed according to sharia principles and under the supervision of a sharia board to deal with certain risks.

If there is a risk to the participant, insurance will be paid from the Tabarru Fund. This concept is also known as risk sharing. In conventional car insurance, the customer pays a premium for the protection he purchased from the insurance company. If there is a risk to the customer, the car insurance company will provide a number of insurance benefits. This concept is also known as risk transferring.

There are some basic differences between Islamic car insurance or sharia car insurance and conventional car insurance in terms of contracts, ownership of funds, surplus underwriting, investment management and insurance supervision. In sharia car insurance, there are several types of transactions that must be avoided, namely gharar or uncertainty, usury or additions and maysir or gambling. So, customer funds in sharia car insurance, especially unit links, will not be invested in things that are contrary to Islam, for example financial and banking products with the concept of usury, cigarettes, and liquor.

Sharia car insurance is a car insurance product according to Islamic principles.

That’s a brief explanation of “car insurance in Islam: basic things you must understand”. As Muslims, we must understand that.

Benefits of Car Insurance in Islam

The important thing about the fatwa on car insurance in Islam which I will explain now is the benefits of car insurance in Islam. I want you to understand that because it is one of the important questions about car insurance that some Muslims don’t understand very well.

If we understand some of the previous explanations, we can conclude that car insurance in Islam is halal insurance. The reason is because car insurance funds in Islam are managed according to Islamic rules.

There are several specific reasons why car insurance in Islam is beneficial insurance:

One: there is an element of protection in car insurance in Islam.

Two: there is an element of mutual assistance in car insurance in Islam.

Three: there is an element of goodness in car insurance in Islam.

Four: there is an element of sharing risks and benefits in car insurance in Islam.

Five: car insurance is part of muamalah.

That is a brief explanation of the benefits of car insurance in Islam. As Muslims, we must understand that.

Read Also:

Concept of Takaful (Islamic Insurance)

5 Fatwa on Car Insurance in Islam

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Founder, Author, Indonesian Blogger, Muslim, Graduate of Al-Azhar University, Cairo, Egypt.

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