QuestionWhat is the ruling on Insurance, whether it be life insurance or property insurance? Answer
Insuring one's life and property is forbidden; it is not permissible due to the fact that Al-Gharar and usury are involved therein.
And Allah - the Almighty the All-Powerful - has forbidden all types of dealings that involver usury and dealings in which there is Al-Gharar, as a mercy for the (Muslim) community and a protection for them for what is harmful to them. Allah - Most Glorified, Most High says: "whereas Allah has permitted trading and forbidden Riba" (usury). (Al-Baqarah 2:275 )
And it has been authentically reported from the Messenger of Allah (Sallallahu 'Alayhi wa Sallam) that he forbade selling Al-Gharar. And Allah is the granter of success.
Shaikh Ibn Baz (Rahimahullah)
Reference: Fatawa Islamiyah Volume 5 Page 19Al-Gharar: The selling of what is not present, such as selling fish before they are caught, or selleing birds before they are caught etc