I own a
motel and it’s in a cyclonic region. I was part owner (33%) with non Muslim
partner for 2 and half years and after that I bought his shares and became 100%
owner for last 2 and half years. Under the law I am obligated to do public
liability and workers compensation insurance under law. I also took out
building insurance before as my partner non Muslim wanted it . After I become
full owner I continued insurance which was not compulsory but I told insurance
company I will pay you premiums and in event of loss I don’t want money you
just get the damage fixed . For last 3 years I have paid insurance of $5,000
per year for building $3000 for workers compensation and $2000 for public
liability . We had a cyclone and had some damage to the buildings. The
insurance company said they can’t fix the buildings as some of the damage was
due to fault in the building design so decided to pay the cost of fixing the
buildings. Can I take this money ? If not can i take back the premiums I paid
to the insurer? If so do I keep back premium of  $10k per year paid for
last 3 years and my portion for the years before and what can I do with the
balance of monies ?

Answer: 

The building insurance that you subscribed to was a voluntary insurance which is obviously impermissible. It is therefore impermissible to derive any form of benefit from such a scheme irrespective of whether you request the insurance company to pay for the damages or repair the damages.

Notwithstanding the above, you are entitled to claim back or derive benefit from the total amount that you had contributed as premiums over the years. Thus in the queried scenario, you may retain your total contributions paid over the years to the insurance company, and any amount over and above your contributions will have to be discharged in charity to poor Muslims deserving of Zakaat without any intention of reward.

At the same time, you should cancel the voluntary building insurance policy due to the impermissibility of the policy.

AND ALLAH TA’ALA ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST

ANSWERED BY: Mufti Mohammed Desai 

CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B 

Date: 29 Dhul Qa’dah 1440 English Date: 01 August 2019