Sharia Compliant Insurance Cover For British Motorists

Good news for more than 2million Muslims residing in Britain. No longer do they need to own a motor insurance by compromising with their religious values. According to the Salaam Halal Insurance, motorists in the UK had no option but to take the regular Motor Insurance cover which were in conflict with the Muslim faith. However, analyst’s belief that with the changing face of Britain, British institutions need to change as well. In a normal insurance cover, the risk is passed on from the policyholder to the company. However, in case of a valid claim even though the payment is made one party suffers loss in many instances the policyholder, if the claim is not settled. There is an element of uncertainty and gambling is not permitted in Muslim faith. ?

To combat this problem, Takaful insurance was introduced in Sudan during the 1970s where a Muslim can gain even at the risk of loss of misfortunes and risk is borne by all the policyholders. Takaful means “guaranteeing each other” and is conceived as a co-operative insurance. It means bearing one’s burden. Takaful insurance is almost the same like the traditional insurance cover but functions slightly in a different manner. In this type of insurance cover, the premium is collected in the form of a contribution in a pool and is then invested in sharia-friendly investments ad the profits earned form these investments are given back to the Takaful fund.? If you require protection from this cover, you must be ready to help others when in difficulty. Islamic insurance promotes supporting each other and contributing enough to cover claims of individuals. At the end of the year, if the profits are more in the Takaful fund then, it is distributed equally among policyholders. ?

It is therefore much welcome news for Muslims in Britain that the government has allowed sharia-friendly car insurance. It has even attracted the non-Muslim community who take interest in co-operative nature. In this respect it is however, interesting to note that at the moment the Islamic insurance industry is a mere 1/1000th the size of the traditional insurance industry and more than half of the policies being sold in Iran. So, there is potential for growth of the insurance industry among the Muslim community. However, the rate of growth is considerably low than what the insurance company is hoping for.

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