Personal injury compensation
In the name of Allah, the most Beneficent, the most Merciful.
Answer
It is unlawful for a Muslim to make false and exaggerated claims. Situations such as a car accident where it is possible to fake injuries, one will not be allowed to receive any damages form the defendant.
However, if one is genuinely injured due to an accident then one is allowed to receive the compensation for the negligent action of the defendant. The permissibility of claiming compensation is based on the principles of Diyyah where if a person is injured then he/she is allowed to an equal retaliation or the monetary value. (Hidayah p.586 v.4)
If one is claiming compensation from an insurance company as a result of a car accident, then one is only allowed to take the annual insurance premium, which has paid to date.
For example, if the injured person suffered from whiplash and is claiming from their own insurance policy with whom they have been with for 3 years and the annual premiums paid to date total £1,500.00 (£500 per year), then one can claim up to £1,500.00. If the insurance company pay out an amount above this then the extra should be given to charity without the intention of reward. (Raddul Muhtar p.553 v.9)
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham
