Short answer
The International Islamic Fiqh Academy and the Saudi scholars forbid commercial insurance because of its gharar and propose cooperative insurance (takaful). Diyanet, by contrast, accepts commercial insurance (2005). Insurance required by law is accepted by many scholars, even among those who forbid commercial insurance.
What the institutions say
Official positions, with their reference. The badge sums up the institution’s position, not an opinion of Assabile.
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International Islamic Fiqh Academy Organisation of Islamic Cooperation, JeddahProhibited
Fixed-premium commercial insurance contains major gharar: it is prohibited. The alternative is cooperative insurance (takaful), based on donation and mutual help.
Resolution 9 (9/2), Jeddah, 1985; resolution 200 (6/21), Riyadh, 2013
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Permanent Committee Council of Senior Scholars and Permanent Committee for Research and Fatwa, Saudi ArabiaProhibited
Commercial insurance, in all its forms, is forbidden because of gharar, riba and its resemblance to gambling; cooperative insurance is permitted.
Council of Senior Scholars, decision 55, 4/4/1397 AH; Ibn Baz, fatwa 1724
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Diyanet Presidency of Religious Affairs, Türkiye (High Council of Religious Affairs)Permitted
Social, mutual and commercial insurance are permitted; with-profits life insurance and retirement savings are permitted if the premiums are invested in lawful assets; insuring something forbidden is not.
Decision 2005/64
Positions are reported as they stand; other scholars may hold other views. Method and disclaimers
Depending on your country
- France
- Third-party motor insurance is compulsory, home insurance is compulsory for tenants, and borrower insurance is required by banks. There is no takaful insurer in 2026; mutual insurers (mutuelles) are the form closest to mutual help, without being compliant for all that.
- Morocco
- Takaful operators have been authorised since the end of 2021 and offer personal and property insurance, notably cover linked to participative financing.
- Türkiye
- Diyanet accepts commercial insurance; tekâfül companies also offer participation-based insurance.
- Gulf states
- Cooperative insurance (takaful) is very widespread; in Saudi Arabia, insurers are organised on a cooperative basis.
- United Kingdom
- The takaful offer is very limited; third-party car insurance is compulsory.
Two readings of insurance
The majority view in the Arab world: in commercial insurance, the insured pays a certain premium in return for an uncertain payout; it is an exchange laden with major gharar that resembles gambling, and the company invests part of the premiums at interest. The International Islamic Fiqh Academy prohibited it and proposed cooperative insurance (resolution 9 (9/2), 1985), whose rules it set out in 2013 (resolution 200 (6/21)). The Council of Senior Scholars of Saudi Arabia took the same position (decision 55, 1397 AH).
Diyanet’s view: insurance spreads the loss among all the insured, which matches Islam’s aim of mutual help; in a world where trade is globalised, doing without it would be a risk. Diyanet therefore ruled that social, mutual and commercial insurance are permitted, except insurance of something forbidden (decision 2005/64).
Compulsory insurance
Many scholars who forbid commercial insurance accept taking out the insurance that the law requires (third-party motor liability, a tenant’s home insurance, insurance required by a contract): responsibility lies with whoever imposes it. They recommend sticking to the compulsory minimum when takaful is not available.
Common cases
- Health insurance: the Academy accepts health insurance taken out directly with a healthcare provider, on terms that reduce the gharar, because of the need linked to preserving life, as well as cover from a cooperative insurer; it prohibits it with a commercial insurer (resolution 149 (7/16), Dubai, 2005).
- Life insurance: commercial life insurance is forbidden according to the majority view; Diyanet accepts life insurance that works through profit participation, if the premiums are invested in lawful assets. See also retirement savings.
- Borrower insurance: required for a loan; see zero-interest loans.
- Takaful: see takaful and the insurers by country.
The verses
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ لَا تُحِلُّوا۟ شَعَٰٓئِرَ ٱللَّهِ وَلَا ٱلشَّهْرَ ٱلْحَرَامَ وَلَا ٱلْهَدْىَ وَلَا ٱلْقَلَٰٓئِدَ وَلَآ ءَآمِّينَ ٱلْبَيْتَ ٱلْحَرَامَ يَبْتَغُونَ فَضْلًا مِّن رَّبِّهِمْ وَرِضْوَٰنًا وَإِذَا حَلَلْتُمْ فَٱصْطَادُوا۟ وَلَا يَجْرِمَنَّكُمْ شَنَـَٔانُ قَوْمٍ أَن صَدُّوكُمْ عَنِ ٱلْمَسْجِدِ ٱلْحَرَامِ أَن تَعْتَدُوا۟ وَتَعَاوَنُوا۟ عَلَى ٱلْبِرِّ وَٱلتَّقْوَىٰ وَلَا تَعَاوَنُوا۟ عَلَى ٱلْإِثْمِ وَٱلْعُدْوَٰنِ وَٱتَّقُوا۟ ٱللَّهَ إِنَّ ٱللَّهَ شَدِيدُ ٱلْعِقَابِ ٢
O you who have believed, do not violate the rites of Allāh or [the sanctity of] the sacred month or [neglect the marking of] the sacrificial animals and garlanding [them] or [violate the safety of] those coming to the Sacred House seeking bounty from their Lord and [His] approval. But when you come out of iḥrām, then [you may] hunt. And do not let the hatred of a people for having obstructed you from al-Masjid al-Ḥarām lead you to transgress. And cooperate in righteousness and piety, but do not cooperate in sin and aggression. And fear Allāh; indeed, Allāh is severe in penalty.
The hadiths
Abu Huraira (Allah be pleased with him) reported that Allah's Messenger (ﷺ) forbade a transaction determined by throwing stones, and the type which involves some uncertainty.
عَنْ بَيْعِ الْحَصَاةِ وَعَنْ بَيْعِ الْغَرَرِ .
Frequently asked questions
Is a payout received from a commercial insurer lawful?
For those who forbid it, the insured is entitled only to the equivalent of the premiums he has paid, the rest being given away, according to many scholars; for Diyanet, the payout is lawful. Ask a scholar about your case.
Is a French mutuelle (top-up health insurance) a form of takaful?
It rests on solidarity between members, which brings it close to the idea of takaful, but it does not apply takaful’s rules (compliant investments, what happens to the surplus, a Shariah board). Many consider it a need when takaful is not available.