I love when religions have rule lawyers like this. It readily discredits the religion. As if their all powerful god can be fooled by fancy paperwork or legal loopholes.
They’re not trying to fool God, they’re trying to fool you into going along with it. They don’t care what God thinks and may not even believe in Him at all, but unless they can convince you of the loophole they’re stuck with the rules themselves.
The bit that isn't rules-lawyered away is that the risk is shared. For the deal to be compliant with the religious law, the lender must accept the same risk as the borrower, equally.
So I guess in this case if the house burns down and the insurance only pays 50% of the agreed value then the lender only receives 50% of their agreed repayment.