Wa `alaykum as-salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
I cannot imagine that there are Muslims in America who still think in this way. It is, in fact, unbelievable. No Muslim, because of his personal view on a controversial matter, has the right to expose the entire community and the mosque —a waqf dedicated to all Muslims — to such a high risk. This is totally in contradiction with the very core of our religion.
Scholars have different opinions on this type of financial transactions. Some believe that it is impermissible, because it contains gharar (ambiguity of date and amount of the liability to be incurred by the company). Other scholars argue that it is permissible, because the amount of this gharar is containable and within limits as it depends only on the accident insured against.
In the Shari`ah, the issue of gharar is much smaller than the issue of riba. Gharar can be tolerated when there is no other contract that replaces the gharar-touched contract.
Also, gharar is tolerated when it is possible to know it with other-than-the-parties sources. Do not we buy a house without looking at its foundations? This is an example of gharar that is tolerated.
In America (like in India), insurance is compulsory, especially for public property that belongs to the whole community. It is even more needed as there are no Islamic takaful insurance companies in America.
Thus, insurance is necessary for houses, cars, and other properties, as any sensible Muslim will realize.
Allah Almighty knows best.