🏠 Takaful-Style Insurance in the U.S., Any Real Estate Investors Navigating This?

Question

Greetings and salutations, all!

I'm new to the BiggerPockets community and just getting started in real estate investment. First-time poster, but long-time lurker 🤣.

I'm reaching out to ask if anyone here is aware of any companies offering Takaful-style insurance (i.e., Islamic-compliant insurance based on mutual risk-sharing and Sharia principles) — particularly for homeowners insurance, title insurance, or even landlord/property policies here in the U.S.

For those unfamiliar, Takaful is a cooperative model of insurance grounded in Islamic finance principles. Instead of traditional risk transfer and interest-based investments, participants contribute to a shared pool designed to help those in need. Surplus funds are usually redistributed or reinvested ethically, and profits are not generated from uncertainty (gharar) or gambling-like arrangements.

While Takaful is widely available in places like Malaysia, Saudi Arabia, and parts of the UK, it seems extremely rare or nonexistent in the U.S. — especially when it comes to property or title coverage.

So I’m wondering:

Have any of you found Takaful-compliant providers operating in the U.S.?

Do you know of ethical or halal workarounds being used by Muslim investors here (like mutual aid models, co-ops, or fatwa-based alternatives)?

How are other faith-based investors handling insurance obligations when there’s no compliant option available?

I totally understand that conventional insurance is required in many cases (e.g., with mortgages), but I’m trying to be as conscious as possible about my approach — especially when purchasing with cash or operating without financing.

Would love to hear from anyone who has explored this or is navigating similar concerns. Even a few company names or creative approaches would be appreciated.

Andrew Bish · Answer

I have not had much luck finding reputable groups offering a takaful structure beyond a google search, even then, I am not sure if those would be accepted by your lender, if you have one. U.S. is absolutely behind on this offering.

If you outright own the property, a takaful-compliant provider is hard enough to come by here, but what happens when we mix in faith based financing? For example, a Ijarah contract places the bank as the owner of the property, and the homebuyer becomes the owner once the cost and any markup is paid. I understand a Murabaha contract does provide the homebuyer with ownership from the purchase data and operates closer to a U.S. conventional mortgage. For conventional U.S. insurance, you have to have an insurable interest to purchase a policy, i.e. you are on the deed of the property you are insuring. Thus, under an Ijarah contract as the investor, the situation turns into almost a sandwich lease if you were to rent out the property.

I'm in Chicago and have been meaning to reach out to Devon Bank as they have a location here, but lend in many states. They have developed their own compliant lending product but likely can speak on how they like to handle insurance.

As for creative approaches... I am not sure that there are non-profit insurance companies, unless you consider your state's FAIR plan, the insurer of last resort. But that is not be a recommendation. There may be some luck finding companies who reinvest their excess funds ethically or sustainably instead of taking a profit. One company I work with, Lemonade, claims they are a "B-Corp". Upon further investigation, this certification is given by a non-profit called B-Lab on the basis of their "Theory of Change, defining social, environmental, and governance best practices for businesses." Here is the link for Find a B Corp. I have not explored the list too toughly. Unfortunately, this may take some research, I'll let you know if I hear anything!

Jay Hinrichs · Answer

Never heard the term before but I have set up sales and investments that are compliant to those religious belief's. Started in the late 70s when I had Saudi clients from SF who owned a Butcher shop and wanted to buy RE .. It was a niche I formed and I sold a lot of property to those clients pier groups. Was unaware of the insurance aspect.

Today I have a program for them for investing that allows handsome returns without collecting interest on their end so compliant again..