then it is not permissible for the pledgee to derive any benefit from the pledged property, even though the pledger has granted permission, because that would amount to ribā (prohibited interest). The Messenger of Allah (peace and blessings be upon him) said, “Every loan that brings about a benefit is ribā.” Although the ḥadīth has some weakness, the scholarly consensus is clear: the lender may not profit from the borrower’s property on account of the loan, for that is ribā. It is likewise unlawful to record such a contract or to testify to it, for the Prophet (peace and blessings be upon him) said, “Allah has cursed the one who consumes ribā, the one who pays it, the two who witness it, and the one who writes it down.” Hence, whenever the debt is a loan and the borrower places a pledge with the lender, it is impermissible for the lender to benefit from that pledge, whether or not the borrower consents, because it is ribā.

However, if the debt is something other than a loan—such as the price of goods sold—and the pledger authorises the pledgee to benefit from the pledged item, then there is no objection to his doing so, for the cause of prohibition is absent. Allah knows best.

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Car Insurance

Question: What is the sharīʿah ruling on insurance? By way of illustration: a person pays a fixed sum each month or each year to an insurance company so that, if his car is involved in an accident and suffers damage, the company will cover the cost of repairs. It may happen that nothing occurs to the car for the entire year, yet he is still obliged to pay this annual premium. Is this form of transaction permissible or not?