Answer
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:
Muslims should not treat insurance compensation as a means of unjustified profit. If the payout reasonably compensates for the actual loss, including reduced vehicle value, the difference may be retained; if there is a clear overpayment, the excess should be given to charity.
Responding to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance & Economics at the Faculty of Economics and Management, Istanbul Sabahattin Zaim University, Turkey, states:
Insurance is not for profiteering. It is only compensation for the damage. Apparently, by putting more effort into searching for a lower price for the repair, you had it done at a lower cost. But also remember that the car’s value declines because of the damage, although it is repaired. So, the difference may partially compensate for that.
If you have any doubt that the insurance company overpaid you, my suggestion is to donate the extra amount to any cause of benevolence, e.g., a Muslim charity. Do not return it to the insurance company because it will disturb their system and create trouble for them and for you too.
👉 Read also:
- Is Car Insurance Haram?
Buying a Car With Interest: Riba? - Car Loan for Necessary Needs: Justified?
- Leasing Cars: Permissible?
- Purchasing Cars Through Commercial Bank Loans: Permissible?
- Is Murabaha in Car Purchasing Compliant with Shari`ah?
- Need a Car: Can My Wife Contribute to the Loan Payments?
Almighty Allah knows best.
