The ruling of Salaam insurance

In the name of Allah, Most Compassionate, Most Merciful,

As explained in detail in many previous answers (available on this website), all prevalent forms of conventional insurance involve gambling and/or interest, hence they are Islamically unlawful. The concession given by scholars in taking out a car insurance policy is merely due to the legal requirement in most countries.

The Islamic alternative for the Haram conventional insurance is known as Takaful (some people call it Halal or Islamic insurance). Takaful has been used since early Islam and literally means guaranteeing each other. It is based on the concept of all the policyholders agreeing to guarantee each other by making contributions to a mutually owned pool. Takaful has various forms and it is difficult for me to outline the details of each of these forms.

As for whether the recently offered Islamic alternative by Salaam insurance is Shari’ah compliant or not, this depends on studying all the terms and conditions in the contract and seeing whether it conforms to the Islamic principles. As such, I am not in a position to comment on Salam insurance, since I have not studied the details of the product offered by them.

There website states that their product is approved and supervised by “a Shari’ah Supervisory Committee consisting of three independent Muslim scholars” and they also undergo regular internal Shari’ah auditing. As such, if you feel confident and you trust the scholars of their supervisory committee, then you may take out insurance with them. The three scholars are well-known in the Islamic finance industry, but I cannot guarantee anything until I don’t study the terms and conditions of the contract myself. You will have to make your own decision based on how well you know the scholars and how much trust you have in them, Insha Allah.

And Allah knows best

Muhammad ibn Adam
Darul Iftaa
Leicester , UK

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