Praise be to Allaah.
Commercial insurance in all forms is haraam, but if a person
is compelled to take out third-party insurance, then there is nothing wrong
with that and the sin is on the one who compelled him to do that. Please see
question number 45918,
If there is a collision between two cars, then the one who is
at fault must compensate for loss of life or limb or property that he
caused. So he must pay diyah for lost lives or injuries, and he must also
repair whatever has been damaged on the car, in addition to the difference
in price between the sound car and the one that has been repaired. This is
something that is neglected by many people.
If the insurance company pays for some of the above, then he
must pay for the rest, no matter how much it is, and his duty cannot be
discharged unless he does that, unless the injured party lets him off.
Shaykh Ibn Uthaymeen (may Allaah have mercy on him) said: The
issue is not just that of repair, rather it is repair plus the devaluation
of the car as the result of the collision. This is a matter which many
people perhaps do not pay attention to. But everyone knows the difference
between the value of a car that has been in a crash, even if it has been
repaired, and its value if it has not been in a crash. End quote from
Fataawa Noor ‘ala al-Darb.
And Allaah knows best.