Can I Claim from Two Insurance Policies?

Answered by Shaykh Muhammad Carr

Question

I have two insurance policies: one reimbursed €900, and the other €700, for a €900 medical bill. Is it permissible to keep the extra €700? If not, should I donate it, and if so, to whom—family, parents, or strangers?

ِAnswer

In the Name of Allah, the Most Merciful and Compassionate.

Thank you for reaching out and seeking clarification on this important matter.

Allah says, “O you who believe, devour not your wealth between you through falsehood; but only through trade by your complete mutual consent.” [Quran, 4:29]

Unless the contractual agreement stipulates otherwise, you are only entitled to a single claim. The extra €700 must be returned or donated.

The Prophet (Allah bless him and grant him peace) has said, “Muslims are bound by their stipulations.” [Abu Dawud]

Double Recovery

Medical aids are regulated by the laws of the jurisdictions in which they operate. These regulations primarily aim to prevent profiteering through claims, a principle that the Shari‘a fundamentally supports.

Double recovery in insurance is when an insured person receives more than the amount of their loss from multiple insurance policies. This is not permitted, as the purpose of insurance is to compensate the insured for their loss, not provide a profit.

In South Africa, the law is clear—no simultaneous, permanent dual medical scheme membership is permitted. When applying for medical aid membership, each scheme asks whether the person is currently or has been a member of another scheme, which one it is, the person’s membership number, and the duration of the applicant’s membership. [1]

Reasoning

Risk-mitigating measures are not intended to generate profits for the beneficiary; their purpose is solely to cover the loss, no more and no less. In suretyship (daman), which is akin to insurance, the guaranteed party has the right to claim their funds either from the initial debtor or the guarantor.

While this is permissible, they cannot exercise the right to collect from both. Khatib says, “If it is argued that the right to demand from both implies that, if he has a claim for one hundred (currency), he would demand two hundred because he seeks one hundred from each of them, which is impermissible, the response is that the prohibition does not lie in the act of demanding itself but in the outcome of the demand, namely taking the amount. He is only entitled to collect from one of them.” [2] [Khatib, Mughni al-Muhtaj]

General Rule of Unlawful Funds

The general rule that applies to disposing of unlawful funds is as follows:

1. Where the rightful owner is known, it must be returned to the rightful owner.
2. Where the rightful owner is not known [or if they refuse], the funds must be disposed of in one of two ways:

a) it must either be given towards a charitable cause that benefits the public at large, such as public hospitals, schools, or mosques;

b) or it should be given in charity to a person who is entitled by his need to receive charity. [Nawawi, Majmu‘ Sharh al-Muhadhdhab]

I pray this is of benefit and that Allah guides us all.

[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Muhammad Abu Bakr Badhib

[1] https://www.keyhealthmedical.co.za/can-one-person-belong-to-more-than-one-medical-scheme/

[2] فإن قيل يلزم من مطابتهما أنه إذا كان له مائة أنه يطالب بمائتين لأنه يطالب كل منهما بمائة وذلك ممنوع. أجيب بأن الممنوع ليس في المطالبة إنما الممنوع في المرتب عليهما وهو الأخذ وليس له إلا الأخذ من أحدهما.

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door for students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.