Question Summary:
Is it permissable to take out insurance if one is required to do so?

Question Detail:

Is it permissable to take out insurance if one is required to do so? I went to FNB and Albaraka bank to find out about their Shariah compliant vehicle finance. They both said they are Shariah compliant, however, both of them do not include the insurance in the product cost.
FNB said they are not allowed by law do so. The National Credit Act prohibits banks to include insurance as the customer must have the ability to make his own choice regarding insurance. The problem im faced with now is that insurance is compulsory if you take out finance for a vehicle. What can i do in such a situation. 

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
In principle and in general without reference to any particular finance house, if an Ijarah agreement includes in it the insurance amount and the amount is capped, then such an Ijarah product will be valid if all the other conditions of Ijarah are fulfilled.
If a separate amount is paid for conventional insurance in an Ijarah financing product, then that product is not Shariah Compliant. The previous Shariah Board of FNB approved the Ijarah Product including the insurance amount. They did not regard the Ijarah product insurance as Shariah Compliant.
And Allah Ta’āla Knows Best                                       
Ismail Desai,
Darul Iftaa
Durban, South Africa
Checked and Approved by,
Mufti Ebrahim Desai.