Conventional car insurance vs Takaful Motor
You may have heard that both conventional car insurance and motor takaful have similarities. It is true that both have the same purpose, which is to provide protection to their policyholders. However, the difference is that takaful is based on Islamic principles. But what exactly is takaful? And what are the other differences between conventional car insurance and motor takaful?
Keep reading for we explain the difference between conventional car insurance and motor takaful.
What is motor takaful?
Motor Takaful is a car insurance plan that complies with Sharia (Islamic) law and principles. Compared to conventional car insurance, motor takaful plans are free from the prohibited Islamic principles of Riba' (interest), Maysir (gambling), and Gharar (uncertainty).
Takaful is an alternative to conventional insurance that exists for Muslim participants, especially to avoid these prohibited elements. However, non-Muslims can also buy takaful products without worry.
Takaful features
The key features of takaful are risk sharing, no-claims bonuses, and Shariah compliant.
Shared risk sharing
Takaful encourages the concept of cooperation and shared risk sharing among participants. In addition, there is no risk transfer involved.
No claims Bonus
Policyholders are entitled to receive a cash rebate from their takaful Company (at least 10%) if they do not file a claim during their policy period.
Shariah Compliant
Takaful schemes are shariah compliant with no dubious transactions. It also prohibits the elements prohibited in Islam, namely Riba' (interest), Maysir (gambling), and Gharar (uncertainty).
Difference between takaful and conventional insurance
As we mentioned earlier, both motor takaful and conventional car insurance have the same goal, which is to provide insurance protection to their policyholders.
However, here are the main differences between the two.
Can Muslims invest in conventional insurance companies?
Based on the information we have provided, conventional insurance may contain elements that are prohibited in Islam, namely Riba' (interest), Maysir (gambling), and Gharar (uncertainty). In contrast, takaful is free from these prohibited elements.
For Muslims, it is obligatory for them to seek what is halal and in accordance with the teachings of Islam.
Furthermore, according to the Muzakarah of the Fatwa Committee of the Malaysian National Council for Islamic Religious Affairs (MJFK), the purchase of conventional insurance products including General Insurance and life insurance is not in accordance with the Islamic religion, especially because it contains three prohibited elements that we have mentioned earlier.
Should you choose conventional car insurance or motor takaful?
Based on what we have shared, conventional car insurance and motor takaful have the same goal, which is to provide protection to policyholders. Both also offer protection for the policyholder's vehicle in the event of an accident, fire, and theft. However, for Muslims, it is mandatory for them to buy motor takaful because it is free from elements that are prohibited in Islam.
Furthermore, Anas bin Malik narrated that Prophet Muhammad (PBUH) once said: "seeking what is halal is an obligation for every Muslim," narrated by Al-Thabarani with a good Isnad.
At Bjak, we offer both conventional and takaful insurance to our customers. You can compare between 15 insurance and takaful providers in Malaysia. Just visit Bjak.my to get your free motor takaful and car insurance quote today.
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