Partnership: Liability for Property Damage When Bank and Insurer Deny Responsibility

Practical Laws of Islam as per the teachings of Imam Khamenei

Partnership: Liability for Property Damage When Bank and Insurer Deny Responsibility

English:

Question #1688:

A person took a loan from the bank and built a house. The property was insured. After part of the property was damaged due to flooding, the bank does not want to admit liability. For its part, the insurance company says that the damage cannot be covered because it falls outside the terms of the insurance policy. Whose responsibility is it then?

Answer #1688:

The insurance company cannot indemnify for the damage because it falls outside the remit of the policy. The cost of repairing the property, and indemnifying for any loss which is not the responsibility of others, should be borne by the owner. As for the bank, if it is a civil partner in the property, it should bear a share of the cost of repair proportionate to its stake unless the damage occurred due to somebody’s default.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Partnership