Is Home Contents Insurance Unlawful?

All prevalent forms of insurance are unlawful (haram), because they either have an element of interest (riba), gambling (qimar) or both. This was explained in detail in many earlier answers.

As far as home contents insurance is concerned, the same ruling would apply. As such, it is not permitted to take out insurance for the furniture in a rented property. The premium paid to the insurance company is actually money being placed at risk. One may not receive anything in return (if nothing was to happen to the furniture), or it may bring more money with it (if damaged was caused to the furniture). This is what we call gambling. Similarly, a small amount of money is paid as premium and may bring about a larger amount in return, which is nothing but Riba.

In order to save yourself from having to pay large amounts for the furniture if something was to go wrong, there are two things you can do:

Firstly, have an arrangement with the landlord that you will not be responsible for any damage that was caused naturally and without you being at fault, such as fire, theft and other similar matters.

Secondly, your landlord may take out an insurance cover if he wishes, and as a result he may increase your rental charge. It would be allowed for you to rent a property wherein the landlord has taken out insurance on the items and furniture. This action of his will not be attributed to you. The increased rental charge should not be considered a payment for the insurance; rather, merely a rental charge.

And Allah knows best