Liability After an Accident and Third-Party Insurance

Question

An accident occurred in March 2025. On reversing from my mother’s driveway, vision was obstructed and my vehcile bumped into a third party vehicle. I offered to cover the damage thinking the cost would be manageable, to avoid conflict. Third party felt he rather claim from his insurance given that the repair would be quite costly. Later in the year (~October 2025), I recieved a claim from Collect-a-debt, a debt collection company as Santam had handed over the claim to them. The claim amounts to ~R125000. They would discount the claim to ~R110000 if paid off in one go.

I responded with a letter disputing liability as the third party may have been speeding at the time. Collect-a-debt replied advising me that I could pay in small monthly installments and to seek legal counsel if I feel otherwise. The claim is subject to interest.

My queries on the above are:

1) Islamically, am I liable to pay Collect-a-debt?

2) If I am liable, and I am able to negotiate a discounted settlement, then can I pay Islamically only this discounted amount?

I obtained a quote for Third-Party only insurance. No cover for fire, theft, or any of my own damages. Essentially, this Insurance does not provide for any personal benefit. It only covers damage to other vehicles. The cost is ~R77

monthly. It also means in the event of my error I would limit the difficulty I put the other party through.

My query is:

3) Would it be permissible for me to take out this Third-Party only Insurance?

Darul Ifta, Madrasah Urwah bin Az-Zubayr · Accepted Answer

As salām ʿalaikum wa raḥmatullāhī wa barakātuhu

In the Name of Allāh, the Most Gracious, the Most Merciful.

Liability after an accident:

According to Islāmic law, an individual will be financially liable if he causes damage to the property of another, regardless whether this damage was caused intentionally or unintentionally. In the case where the opposition party chooses to appoint a debt collection agency, the liability will remain upon the individual who caused the damage.

Therefore, in the enquired scenario, if you were at fault then you will be liable to pay this company for the actual cost of repairs and other legitimate expenses. You will not be liable under Islāmic law to pay any additional interest or non-legitimate charges added to the claim. It will be permissible to negotiate the amount and reach a mutual agreement for a discounted amount.

Conventional third-party insurance:

One of the greatest pillars of Īmān is to place one’s trust completely in the plan of Allāh ﷻ while adopting all permissible means. Allāh ﷻ says in the Qur’ān:

لا يكلف الله نفسا الا وسعها

Translation: “Allāh ﷻ does not burden a soul beyond what it can manage.”

Respected brother, every difficulty, loss, or financial strain that a believer experiences, is measured and known by Allāh ﷻ and only happens through his wisdom. There are plenty Aḥādīth which mention the rewards of a believer who is faced with difficulties or challenges. Take note of one such Ḥadīth:

‌عجبا ‌لأمر ‌المؤمن، إن أمره كله خير، وليس ذاك لأحد إلا للمؤمن، إن أصابته سراء شكر فكان خيرا له، وإن أصابته ضراء صبر فكان خيرا له

Translation: Amazing is the affair of a believer for there is good in every matter of his and this is not the case with anyone else except a believer. If he is in times of ease (comfort) he is grateful to Allāh ﷻ, thus there is a good for him in it, and if he is faced with difficulty he exercises patience, thus there is a good for him in it.

All forms of conventional insurances are not permissible and should be avoided, including third-party insurance. A believer should remain mindful that whatever Allāh ﷻ has decreed for him will never miss him, and whatever has not been decreed for him will never reach him, whether he is insured or not. May Allāh ﷻ grant us contentment with his decree and protection through complete reliance upon him alone. Āmīn

And Allāh Taʿālā knows best.

Question

Answer