What is halal insurance?
بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم
In the name of Allah, the Most Gracious, the Most Merciful
There are two major categories insurance is divided into. The first type is property and casualty insurance. The second type is life and health insurance. The way insurance works is that there is a premium that is paid by the client in lieu of the probability of future losses in belongings, assets, health or death. A legal transaction in Islam is when the money is given in lieu of goods or services.
Insurance, on the other hand, is paying money for the probability or chance of something bad happening. For this reason, it is similar to gambling, deception and riba (interest).
If a person is forced by the law to get insurance for his/her car or health, then he can get it but only to the level that satisfies the law. If he doesn’t get money from the insurance, then he can only use the amount that he paid in the premium and the rest should be given charity.
The proper alternative to insurance is a takaful partnership. You can read more about takaful in the following link:
Only Allah knows best
Written by Maulana Shadman Ahmed
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
 Fatawa Uthmani, Volume 3, page 314-316