Sharia car insurance: For the first time, Muslims can buy policies in line with Islamic law

Salaam Halal Insurance provides the same services as conventional companies but it is compliant with Islamic law. This means it cannot invest in any organisation associated with gambling, alcohol or pork. It is also not allowed to take financial risks or speculate with revenue.

Halal insurance – known as takaful – differs from standard British products because the risk is shared between policyholders. Drivers pay into a fund, which is then invested in sharia-compliant ventures and any profits are put back into the fund.

Claims are paid from the pooled sum and any surplus cash is distributed in the form of a discount for the following year’s premium. This is in addition to any conventional no-claims bonus.

Clear conscience: Abdul Khalisadar has bought a Sharia policy

A committee of three independent Muslim scholars monitors the activities of the firm, which says its premiums are in line with the industry average and that it is able to match its bigger rivals because it is so confident of repeat business from Britain’s 600,000 Muslim car owners.

One of its first customers is father-of-two Abdul Khalisadar of Leyton, East London. The 35-year-old pharmacist, who drives a BMW, says his conscience made him pick Salaam Halal’s policy. But he added: ‘It is competitive as well.’

Peter Staddon, of the British Insurance Brokers’ Association, agrees that  reaction to the cover is broadly positive.

He said: ‘It’s exciting to see a completely new product on the market.

'And I think there will be many people – Muslim and non-Muslim – who will want to switch to a company that does not invest in weapons, alcohol or gambling.’

Salaam Halal Insurance – which has a shareholder-owned parent company – is the latest firm in Britain to offer a service designed to appeal to Muslims. Some McDonald’s outlets now serve halal chicken, while larger branches of Tesco offer a range of halal foods, including chocolate.

So far, it has targeted the Muslim community through Islamic publications and on billboards. But it hopes to attract customers of all religious backgrounds.

Company headquarters are in London, and it operates a call centre in Greater Manchester where customers can speak to operators in English, Arabic, Bengali, Gujarati or Urdu.

Chief executive Bradley Brandon-Cross said: ‘The face of Britain is changing and it is the responsibility of British institutions to cater for such changes and welcome diversity.’