Car Insurance in Canada

14-4-2000 | IslamWeb

Question:

In Canada there are two things which are imposed by law, one you have to have a car insurance if you want to drive a car.

---

Answer:

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

The type of car insurance that is common in many countries is pure gambling which is forbidden by the Sharee'ah. In such insurance, the insured pays an amount without knowing whether he would recover the same amount, or an amount that exceeds many times the one that he had paid, or even not recover anything at all.

But if the person is obliged by law to ensure his car and happens to have an accident, if he is at fault, it is lawful for him to take back from the insurance company an amount equal to what he has paid but not more. If he is not at fault, he may accept compensation from the person at fault regardless of its source. This contract is considered by the Sharee'ah as invalid and the ruling concerning invalid contracts is to return the capital to its owner without any additional interests or profits. Allah Says (what means): {But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.} [Quran 2:279]

Allah knows best.