What is Halal car insurance?

There’s been some good news in the car insurance industry for the Islamic community as Salaam Insurance introduces the UK first Halal Car Insurance product which is in line with the faith of Muslims as it is Shariah compliant. Before its introduction, Muslims had no choice other than to take any other car insurance cover to abide by UK motoring laws but now it seems that those days are finally over. This specific type of car insurance does not contradict the religious faith of Muslims and will enable them to have a good conscience when it comes down to insuring their vehicles for driving.

How does the Shariah Car Insurance work?

It works on the principle of Takaful which means drivers will be guaranteeing each other instead of the insurance company taking the risk for its customers. Therefore policyholders will be making contributions in a Takaful Fund instead of paying premiums to the insurer. This fund is invested in selected organisations which are non-alcohol or non-pork related, that is, organisations which are compliant with Islam.
Any claim which is made is paid from the pooled sum and any surplus cash is distributed in the form of a discount to the driver for the following year’s premium on top of any no claims discount (NCD) which the driver has accumulated.

How much does the Islamic Car Insurance cost?

As we’ve said earlier, you will not be paying premiums for insurance cover but will be making contributions instead and the contributions that you will make will depend on the level of cover you are seeking and your personal circumstances.  There’s also a Wakala fee that you are required to pay and this goes into the administration and operating costs of Salaam Halal Insurance. This fee has been agreed by a group of internationally learned Shariah scholars.  The Halal car insurance quotes are very competitive and might be worth a try if you’re planning on switching to this type of insurance.

Can anybody take out the Muslim Car Insurance product?

The Halal car insurance has been primarily designed for Muslim drivers who require a product which is more aligned to their religion. However anybody wishing to join this insurance scheme is free and encouraged to do so. The underlying policy will give you the protection that you need as with any conventional insurance and it’s only the way that this system works which is different.