Subject: Receiving court determine...

Egypt's Dar Al-Ifta

Subject: Receiving court determined compensations from insurance companies


We reviewed request no. 1864 for the year 2005 which includes the following:

    I am an attorney and my practice involves filing compensation claims against insurance companies on behalf of those who have lost a parent in an auto accident or those involved in similar or other types of accidents. The heirs, or the injured, sometimes wish to sue the companies providing their insurance coverage. As some people have doubts about compensation issues, my questions are:

1. What is the ruling for filing compensation lawsuits?
2. Is it lawful to receive compensations, the sum of which is determined by the court?


    According to many contemporary scholars, financial compensations which insurers are obligated to pay are permissible because they are rights acquired by virtue of a valid legal contract.

    Scholars based their opinion on the concept that insurance contracts are donations in which major gharar [risk taking] is overruled since the risk in these type of contracts does not lead to disputes between the parties. This is unlike commutative contracts which recognize only minor gharar that does not lead to disputes, as dictated by Islamic law.

The Ruling

o It is lawful to claim compensations.
o It is permissible for attorneys to file compensation claims against insurance companies and receive fees for their work, provided they engage in their work with honesty, without fraud, deception or unlawful acquisition of funds.

Allah Almighty knows best

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