'Weather promotion' as a marketing tool for insurance companies

26-3-2014 | IslamWeb

Question:

Is this type of business promotion haram? A weather promotion is a marketing program in which the assured offers a full or partial refund or rebate on the purchased product or service, should a future weather event occur. For example there is “Rainy Day Promotion” where, if it rains at least an inch on a specified day, the product purchase price is refunded. Popular days used are Memorial Day, Independence Day and Labor Day. Insurance companies offer an insurance product that we can pay a premium for. Say we insured $10,000 worth of sales for a two week promotion. Customers buy our products and if it rains (for example on labor day), we will refund their total purchase price. Insurance companies sell us an insurance policy to insure the event so if it rains and their is a refund to be issued, the insurance company will pay. Otherwise, we sold the products and customers paid for it. So what is the ruling on this?

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

It is not permissible to promote or deal with the system of commercial insurance which is deliberately based on aleatory and gambling. Apparently, what you mentioned belongs to this type of insurance and rather, the aleartory element in it is more. For more information, please refer to Fataawa 81425 and 81441.

Therefore, it is not permissible for you to promote the said insurance or sell its products to the participants whether in the cases you had mentioned in the question or else, as this is helping in sin and aggression and we are prohibited from doing so. Allaah says (what means): {….but do not cooperate in sin and aggression.}[Quran 5:2]

Allaah Knows best.