Is title insurance impermissible, given that it protects the buyer from previous property issues such as unpaid taxes, fraud, or ownership claims from unknown parties?
Insurance is of two types: 1. Commercial Insurance: This is prohibited because it is based on uncertainty (), usury (riba), and gambling (), unless the system mandates it. In that case, there is no sin upon the Muslim, as they are compelled. 2. Cooperative Insurance: This is permissible because it is based on donation and cooperation and does not aim for profit.
The fact that prohibited insurance achieves benefits does not make it permissible. Prohibited things often have some benefits, but their harm is greater, as Allah Almighty said about intoxicants and gambling: (They ask you concerning wine and gambling. Say, "In them is great sin and [yet, some] benefits for people. But their sin is greater than their benefit.") Al-Baqarah/219. Problems that might arise from not having insurance can be avoided by verifying before purchase and taking necessary precautions.
Summarized from the full answer at Ftawy · imported
Read the full answer on Ftawyhttps://ftawy.com/en/questions/18990
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 18990
- Imported
- Translation status
- Source text, unreviewed
- Read the full ruling
- Read the full answer on Ftawy