Giving Maaser from Insurance

By Rabbi Chaim Chazzan

Is one obligated to give maaser from money received from an insurance payment as a result of a fire or the like?

The Torah (Bamidbar 18:23) obligates a person to give maaser from certain specific agricultural products. Whether the practice to set aside maaser from money is an actual obligation, or merely a praiseworthy custom, is a debate among Poskim[1]. Many achronim accept the lenient view[2].

Once someone began giving maaser (some say[3] even once), it acquires the status of a neder[4] (vow) for this person and he is therefore obligated to continue this practice, unless he explicitly stipulated in advance that it is bli neder (the same is true for any worthy practice). If it becomes impossible for him to continue, a rov should be consulted. (For although generally vows related to tzedakah cannot be nullified[5]; in some circumstances it may be possible for the rov to annul it[6]).

The practice of giving maaser on money earned applies only to the profit, i.e. the excess after accounting for the expenses incurred to obtain the profit[7]. Therefore in order to determine whether an insurance payment is subject to maaser, we would need to establish if is considered profit. For someone to be eligible to receive an insurance payment, he needs to have had paid that months premium and have had a fire that caused damage. In other words, there was an outlay of the amount of the premium and the sum lost by the damages caused by the fire. The intention of insurance is to enable him to recover the losses caused by the fire, but not to pay him more than he lost. Therefore usually insurance is comparable to a business venture that only earned back the amount invested, and would not be subject to maaser.

However, often the insurance company’s objective assessment of the damage is more than the actual loss to the individual. For example: if a person CH”V has a car crash and the insurance company assesses that the car is not worth repairing and therefore gave him the value of the car. However, the owner decided to have the car fixed and managed to find someone to do it for less than the insurance payment. The difference between the sum he paid for repairing the car and the sum that the insurance paid is profit, which is hence subject to maaser[8]. (Needless to say, it must be determined that it is legally permitted to take the excess money from the insurance company).