Can One Take Reimbursed Money From an Insurance Company?
Answered by Mawlana Ilyas Patel
Question
I have a question regarding car insurance. Our insurance company required us to install a tracker in the car to prevent theft. They would almost double the monthly premium if we did not install it. So we installed it and paid for it from our pocket. The insurance company then reimbursed us this amount. Is this amount permissible to take?
If a car was a write-off in an accident and the insurance company paid the market value, more than what was payable to the leasing company. Could one keep the remaining extra funds?
Answer
In the Name of Allah, the Most Merciful and Compassionate
I pray you are in good faith and health.
It is permissible to take the money. It was your money; it was their way of ensuring you install it. Otherwise, the price would be higher. This way it is a good safety measure for you and the car.
Suppose the insurance company offered the money after you reported the accident without you claiming any money towards it. In that case, it is permissible to take what you gave to the leasing company and give the rest to charity or return it.
If you pay for insurance, you should only claim the amount you have contributed, which is the minimum legal requirement. If you claim more than that, it would be considered interest because it is an exchange of money for money where one party gains and the other loses. [Usmani, Fiqh al-Buyu]
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I pray this helps answer your question.
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel has received traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.
