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GAP Insurance

Last updated: 31st December 2022
Question ID: #7900
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Assalamu alaykum, Here in the UK car insurance is compulsory as we know. When buying or leasing a car on any sort of finance (including 0% interest) car dealers offer you an optional insurance called GAP insurance. This is because if the car is written off ( by accident, theft or fire) the insurance will pay out the current market value of the car not the purchase price (what you still owe). The insurance money goes to the owner ( the lender) and if there is a shortfall you the customer have to pay the lender..so the GAP insurance is supposed to cover the shortfall.. Is taking this GAP insurance permissable?

بسم الله الرحمن الرحيم

الجواب حامداومصليا

It will not be permissible to take out such insurance.

And Allah knows best

13 Jumadal Thania 1444/ 06 January 2023

Answer last updated on:
6th January 2023
Answered by:
Ulamaa ID 04
Location: London