Question:

What is the ruling on Insurance, wether it be life insurance or property insurance?

Answer:

Insuring one’s life and property is forbidden; it is not permissible due to the fact that Al-Gharar (Uncertainty, Risk or Speculation) and usury are involved therein. And Allah – the Almighty the All-Powerful – has forbidden all types of dealings that involver usury and dealings in which there is Al-Gharar (Uncertainty, Risk or Speculation), as a mercy for the (muslim) community and a protection for them for what is harmful to them. Allah – Most Glorified, Most High says:

“wheras Allah has permitted trading and forbidden riba” (usury). Al-Baqarah 2:275

And it has been authentically reported from the Messenger of Allah (sallAllaahu ‘alayhi wa sallam) that he forbade selling AL-Gharar. And Allah is the granter of success.

Shaykh `Abdul-`Azeez Bin Baz
Fatawa Islamiyah, volume 5 / page 19

source: fatwaislam.com

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