Question

السَّلاَمُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَاتُهُ
My question is that is the insurance of electric appliances such as air conditioners or washing machine allowed in Islam?
The fact is that these appliances are very costly to afford for a middle class family, so after purchasing the appliances some company offers AMC plans in which they charged a fixed amount of money for a pre decided period of time and during that period if the appliances got some defects the company will send their technicians to repair or replace the defected parts for free as a pre planned agreement under the AMC
So please answer my question in the light of Quran and Sunnah.
Jazakallah Khair.

Answer 1

Ref. No. 2773/45-4325

In the name of Allah the most Gracious the most Merciful

The answer to your question is as follows:

In the Holy Quran and hadiths, we are ordered with strict words to avoid usury and usury based transactions, even it is said that if those who take and give usury and do not repent, they should be ready to fight against Allah and His Messenger, so all kinds of usurious transaction is forbidden and Haram, thus the matter should not be taken for granted. Therefore, just as life insurance, medical insurance, etc. are prohibited, insurance of goods is also prohibited. You deposit extra money for a fixed period of time, during which you may not need to repair the equipment at all and lose the money. And maybe, so many repairs are needed that the insurers lose. So that is a form of gambling which is clearly prohibited in Islamic Shariah. If the service is given by the said company without an extra charge, it will be allowable and there should be no harm in it.

And Allah knows best

Darul Ifta

Darul Uloom Waqf Deoband