If the car insurance is mandatory by law, is it permissible to submit a claim for the car repairs on the insurance? – Ibn Baaz
Q1: In this country, car insurance is mandatory by law. If a one has a car accident, is it permissible to submit a claim for the car repairs on the insurance?
A: If it is compulsory and a person has no choice, they should not take more than what they paid because this is a form of gambling.
For example, if a person pays ten thousands to an insurance company, they should only take ten thousands only and if they pay four thousands, they should take four thousands only; for it is not permissible to accept any profit. If one receives an additional amount it should given it in charity.
Fatwas of Ibn Baz – http://www.alifta.com
Note from AbdurRahman.Org : If the car insurance is mandated by Law, then it is not permissible to opt for Comprehensive Insurance or Full coverage but one should opt for Third Party Insurance / Basic Coverage.