Fatwa n° 520

Category: Fatwas about financial transactions

The ruling concerning the indemnity
from commercial and social insurance

Question:

I had a traffic accident while boarding a taxi that overturned several times, I sustained a fracture in my spine which made me half paralyzed, and as usual, the commercial insurance company pays the damaged person a specific amount of money for this damage. The amount is divided into two parts: one part for the damaged person and the other part for the person who looks after the damaged person and helps him pushing his wheelchair. So, what is the ruling concerning this indemnity? And what is the ruling regarding the second part of the indemnity paid to the assisting person? And because of this accident I was granted a long-term sick leave. So, what is the ruling concerning my monthly salary given to me from the insurance company in this period? May Allah reward you with good.

Answer:

All praise is due to Allah, the Lord of the Worlds. Peace and blessing be upon whom Allah sent as a mercy to the Worlds, upon his Family, his Companions and his Brothers till the Day of Resurrection:

Originally, the commercial insurance, and the other insurances, are counted among the eventual financial commutative contracts that encompass excessive risk, ignorance, gambling and wager. That’s why the Muslim should keep himself away from them as much as possible, but if he was forced to pay the portions and the government imposed it on him in any domain, it is therefore a compulsion under which he pays the portions unwillingly. He is allowed to take a compensation for the damage that he has been subjected to. He is allowed to take it either from the commercial insurance if he was not indemnified by the person who made the accident or the person who caused it, and there was an urgent necessity to take the compensation as he cannot afford his needs of treatment and medication, or from the social security equally to what he paid. As regards to the indemnity that is more than what he paid, if he knows that the insurance continues to deduct a share from his monthly salary, he is allowed to benefit from the sums granted to him from the insurance as an indemnity ofthe damage that he has been subjected to, since the sums will be gradually deducted from his salary, according to the rule: “Benefit is in proportion to damage”.

The perfect knowledge belongs to Allah عزَّ وجلَّ. Our last prayer is all praise is due to Allah, the Lord of the Worlds. Peace and blessing be upon our Prophet, his Family, his Companions and his Brothers till the Day of Resurrection.  

Algiers, Sha‘bân the 1st, 1427 H
Corresponding to: August the 26th, 2006 G.

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