Insurance in Iceland

Fjármálaeftirlitið (FME), within Seðlabanki Íslands, supervises insurance terms, sales, claims settlement and customer conduct. Insurance Activities Act 100/2016 and Insurance Contracts Act 30/2004 provide the main legal framework. Licensed Icelandic insurers and insurers from the European Economic Area may offer cover in Iceland under the applicable authorization rules. Common providers in the NTÍ process include Sjóvá, TM, Vörður and VÍS. Social protection is administered mainly through Tryggingastofnun ríkisins (TR) under the Social Security Act 100/2007 and Social Assistance Act 99/2007. It includes old-age, disability, medical and rehabilitation, child, survivor, death, spouse and carer benefits. Old-age support generally requires age 67 and at least three years of residence in Iceland, although payment may start from age 65 in some circumstances. Applications are made through Ísland.is or My Pages, and residence, income and pension-fund rights can affect entitlement. Membership in a pension fund is generally mandatory from ages 16 to 70. The minimum total contribution is 15.5% of wages, usually shared between employee and employer. Pension funds provide lifelong old-age pensions and mutual disability and death-income protection. Optional private pension savings can supplement these benefits, while pension-fund payments may reduce an old-age allowance from TR. Unemployment insurance is administered by the Directorate of Labour through the Unemployment Insurance Fund. Access generally requires age 18 to 70, an Icelandic work history, legal residence and physical availability for work. A claim should be made no later than the first day of unemployment because payments are not normally retroactive. Job-search confirmation is required each week, and from 1 July 2026 the maximum benefit period is 24 months; some applicants already receiving benefits may have a 30-month period. Decisions can be appealed to the Welfare Appeals Committee. The Directorate of Labour also administers the Maternity and Paternity Leave Fund. Each parent normally has six months, with a combined maximum of twelve months. Normal eligibility requires six continuous months of work in Iceland before the birth and at least a 25% work rate in each month. Payments generally equal 80% of average wages, subject to a maximum of ISK 800,000 per month. Statutory health insurance is administered by Sjúkratryggingar Íslands and is separate from private health insurance. A person establishing a new legal domicile in Iceland generally faces a three-month waiting period. EEA, Nordic, United Kingdom and Swiss rules, S1 or A1 documents and bilateral agreements can preserve or shorten access. A residence-permit insurance policy must generally remain valid for at least three months and provide at least ISK 2,000,000 in cover. Statutory accident insurance covers qualifying unexpected work, vocational-training, rescue and comparable accidents. The employer or injured person usually reports the accident within one year. Since 11 March 2026, accident-related medical expenses are generally not reimbursed through the accident scheme; health-insurance co-payment rules apply where the person has health cover. Cash sickness benefits may also interact with rights from an insurer, union or pension fund. Private insurance commonly covers motor liability, fire, home contents, property, personal liability, accidents, sickness, health and life. The policy determines the insured risk, sum insured, premium, deductible, exclusions, safety duties and claims procedure. A provider should be checked in the FME register, and an insurer's risk assessment can affect acceptance, price and exclusions. Every motor vehicle normally needs compulsory liability insurance under the Vehicle Insurance Act 30/2019. The owner or registered keeper is responsible for maintaining it. When ownership changes, the Icelandic Transport Authority transfers the liability policy to the buyer and cancels the seller's policy. Vehicles from EEA or EFTA countries and the Faroe Islands carry third-party cover under the applicable arrangements; vehicles from outside those areas need a Green Card. Collision or comprehensive cover is separate, and class I mopeds are an exception to the statutory insurance obligation. Náttúruhamfaratrygging Íslands, usually called NTÍ, is a public institution under Act 55/1992. It covers direct loss to all buildings from volcanic eruptions, earthquakes, landslides, avalanches and water floods. Fire-insured movable property and contents also receive natural-hazard cover, but consequential loss and business interruption are excluded. The statutory premium is collected with fire insurance. The latest official rate notice sets the rate at 0.0375% of the insured amount from 1 January 2025, although a general coverage page still shows 0.025%; the current amount on the policy or bill should therefore be checked. The own risk is 2%, with minimum amounts of ISK 400,000 for a building and ISK 200,000 for movable property. After damage, notify the insurer or NTÍ immediately, take photographs, preserve evidence, limit further loss and avoid repairs before an assessment unless urgent protection requires action. Provide the policy, incident description, invoices and any relevant police, medical or employer records. A natural-hazard loss normally has a one-year legal reporting limit, and an appeal against an NTÍ decision must generally be filed within 30 days. A policy document should identify the cover, term, parties, premium, due date, exclusions, safety rules and claims-notification period. The policyholder must give accurate risk information, prevent and limit loss, notify the insurer without undue delay and preserve claims against a liable third party. An ordinary insurance benefit claim generally becomes time-barred four years after the end of the year in which the necessary knowledge arose, subject to an absolute ten-year limit. Capital life claims generally have a ten-year period and an absolute twenty-year limit. For an automatically renewing policy, the policyholder may normally cancel at renewal within one month after receiving the renewal notice and no later than two weeks before the term ends. A mid-term switch to another insurer generally requires written notice one month in advance and takes effect at the end of the following month; the notice should identify the new insurer and effective date. Unused premium may be refundable under the contract or law. An insurer may terminate mid-term only on specified fair grounds, normally with at least two months' written and reasoned notice, and policy terms generally cannot be changed unilaterally during the term. A complaint should first go through the insurer's own process. The Insurance Complaints Committee, úrskurðarnefnd í vátryggingamálum, can issue a reasoned ruling, but it has no administrative appeal process and court proceedings remain possible. NTÍ has a separate Appeals Committee. Decisions on public benefits generally go to the Welfare Appeals Committee, usually within three months. Compare statutory cover, private cover, exclusions, deductibles, deadlines and the responsible body rather than assuming that one insurance product replaces another.