Now there is a new competitive Shariah-compliant landlord policy
The teachings of the Quran can sometimes pose challenges for devout Muslims who also happen to be landlords. The legal and fiscal need to obtain landlord insurance is clear. Besides the obvious need to protect an income stream, if problems with a property affect tenants or their property, the responsibility for this lies with the landlord – and insurance is the bulwark. However, conventional insurance conflicts with Islamic teachings that proscribe “riba”, or usury, and “gharar”, or excessive uncertainty.
What Takaful insurance is
For centuries now, “Takaful” has been used as an Islamic, or halal, alternative to conventional insurance arrangements by ensuring that Muslim landlords can protect themselves and their families from certain financial losses. Essentially a cooperative arrangement, the use of “Takaful” follows a variety of models. In one, regular donations are made by concerned companies and individuals, and the funds gathered are used to reimburse donors for any losses. Profit is not the focus.
How Takaful has grown globally
“Takaful” has a growing market
Once confined largely to the Middle East, “Takaful” has taken off on the global stage over the last few years. This is immensely helpful for Muslim landlords looking for cheap landlords insurance that is also Shariah-compliant. Of course, to some degree, what is and what is not Shariah-compliant depends on an individual’s particular interpretation of religious texts, and different scholars can interpret the same text in widely differing ways. The government-established Money Advice Service offers some basic advice on Shariah-compliant financial products.
Filling the Shariah-compliant gap
Shariah-compliant landlord insurance policies
Although there are a variety of “Takaful” insurance arrangements, Shariah-compliant landlord insurance has been hard to come by, leaving many Muslim landlords in a quandary. However, a new product launched recently by InsureHalal now promises to fill the gap.
Where InsureHalal leads the way, other providers are bound to follow, particularly given the continuing strength of the rental market. In due course, landlords can expect to find Shariah-compliant landlord insurance policies on brokers’ platforms, such as https://brokersdirect.co.uk/. This will enable them to compare different policies and choose the best one for their circumstances.
As an added bonus, many providers of Shariah-compliant insurance policies of all types pride themselves on ensuring that their products are ethically sound, eschewing any connection to activities such as gambling and alcohol. It is possible that this may attract other customers who are not primarily seeking Shariah-compliant policies.
Summary
This article looks at Takaful, an Islamic alternative to conventional insurance that avoids interest and excessive uncertainty, and how it can help Muslim landlords get Shariah-compliant cover. It notes that Takaful has grown from a mainly Middle Eastern product into a global one, and that providers such as InsureHalal are starting to fill a gap in Shariah-compliant landlord insurance in the UK.
Questions this article raises
- How does Takaful insurance actually work financially compared with conventional insurance?
- Are Takaful landlord policies typically more or less expensive than standard cover?
- Which other UK insurers offer Shariah-compliant landlord products besides InsureHalal?
