In my country, India, car insurance in mandatory. My question is: can we choose among the various insurance policies? There is basic, premium, comprehensive, zero depreciation, bumper to bumper, and many more policies and coverages. Can I choose among them? Or should I go with the basic policy? Basic policy has the lowest coverage, while bumper to bumper insurance is a zero depreciation policy. Can I go with the premium bumper to bumper insurance? Can I choose among different policies?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah and that Muhammad, sallallaahu ʻalayhi wa sallam, is His slave and Messenger. 

All forms of commercial insurance are prohibited due to the elements of gambling and gharar (uncertainty) in its most extreme form that they involve.

It is impermissible for the Muslim to partake in commercial insurance contracts if they are optional. However, if he has no option and it is mandatory and he could not escape it even by tricks, then he is held in the same legal status of the one compelled to do a prohibited act or neglect an obligation; and the one forcing him to do so bears the sin for it.

In this case, he should opt for the basic policy and not the premium or the forms of the insurance contracts mentioned in the question, in abidance by the verse that reads (what means): {So, fear Allaah as much as you are able} [Quran 64:16] and the verse: {But whoever is forced [by necessity], neither desiring [it] nor transgressing [its limit], there is no sin upon him. Indeed, Allaah is Forgiving and Merciful.} [Quran 2:173]

Thus, you come to know that you do not have a choice between the prohibited forms of insurance; rather, you are allowed to opt for the least acceptable insurance policy only in case of necessity because what is permissible due to necessity is restricted by it and should not transgress it.

For more benefit, please refer to fatwa 81425.

Allaah knows best.