Salaam Halal Car Insurancetakaful ikhlas
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 gets peace of mind and in the event of a valid claim, the claim settled. This brings 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 strictly in Sharia compliant investments and any profits 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 burden, 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 sold are 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-labelling as 'Islamic' is not enough to win customers, and success can only come by competing 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 isn't simply enough to guarantee a market, Muslims, like everyone else, want a competitive car insurance price and if Salaam Halal car insurance can't deliver on that, then just being the Sharia friendly alternative may not be enough to survive in an extremely competitive market.