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Salaam Halal Car Insurance


The 2 million driving Muslims on Britain's roads today will now be able to take out car insurance that does not conflict with their beliefs. Bradley Brandon-Cross the chief executive of Salaam Halal Insurance who now offers the new insurance for Muslims said that "Conventional United Kingdom insurance options conflict with the core beliefs of the Muslim faith and, as a result, gives Muslims living in the UK who wish to drive a car no choice but to go against their beliefs in order to follow the law, which requires motorists to have cover. "

The major issue for some Muslims is that conventional car insurance can be seen as a form of gambling which Bradley Brandon-Cross continues to explain; "In return for paying the premium, the policyholder obtains peace of mind and in the event of a valid claim, the claim settled. This represents elements of uncertainty and, in the view of Muslims, gambling, into the contract as one of the two parties will make a loss, especially the policyholder if no claim occurs. "

In 1970s Sudan a concept know as Takaful was invented to help get around the gambling concept associated with conventional insurance policies. Takaful offers the same amount of protection as every day insurance policies, but operates in a different way. Instead of betting against the likelihood of any misfortune Takaful insurance participants pay a certain amount into a pool which is invested in strictly in Shariah compliant investments and any profits made made are distributed back into the fund.

This type of insurance can be best described as a co-operative style of insurance where any person who needs cover must be able to donate to other participants who face difficulties. This whole idea is based on the philosophy of bearing another burdens, strictly non profit, and is there to help the policyholders when they need it.

Some believe that with the growth of other Muslim friendly products such as Islamic bank accounts, mortgages and child trust funds, indicates that there is a massive market for these types of insurance products. Yet in truth it is believed that the Islamic insurance industry is only 1/1000 of the size of the normal insurance industry, this combined with the fact that over half of the Islamic insurance policies are sold in Iran may mean that there may not be such a big market as originally thought.

Junaid Bhatti director of independent Islamic Finance commented on the Salaam Halal car insurance policy saying that "One thing the Sharia finance industry should have learned by now is that simply self-labeling as 'Islamic' is not enough to win customers, and success can only come by competitiveness on price and having an appealing promotional message. "

There is no doubt that Salaam Halal car insurance are offering a great alternative to conventional policies, and that they now offer Muslims the chance to take out car insurance policies without worrying that they are breaking Sharia law.

As Bhatti said being the Islamic alternative is not simply enough to guarantee a market, Muslims, like everyone else, want a competitive car insurance price and if Salaam Halal car insurance can not deliver on that, then just being the Sharia friendly alternative may not be enough to survive in an extremely competitive market.


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