Islamic banking customers get home insurance

HSBC is offering Islamic banking customers tailor-made building and home contents insurance.

The Islamic home insurance complies with Islamic law – Shariah – which is based on the concept of risk sharing.

This Takaful insurance takes into account various Islamic principles, which includes prohibitions on the earning of interest on the investments made with insurance contributions.

Britain's more than 1.6 million Muslims - 250,000 of which are homeowners – have so far struggled to find home insurance that is compliant with the Shariah law, says HSBC Amanah's UK head, Amjid Ali.

HSBC's Home Takaful policy is the first of its kind to be nationally available and I am confident that the ethical nature of the Takaful system and its attributes of fairness will have broad appeal, Mr Ali says.

The bank launched its Islamic banking services, called HSBC Amanah, in 1998. It offers Islamic banking customers current accounts, home finance and a pension fund that is compliant with Shariah.

The new home insurance policy offers home insurance cover of up to £400,000. Home contents insurance is offered with a maximum of £50,000 and a single item maximum of £5,000.