• When compensation is paid out and reconstruction is not allowed, the owner can dispose of the funds as they wish without any obligation to continue living in Grindavík

• It is clear that results of damage inspections will not be announced before the end of the year.

• The 15% deduction from damages is not applied when reconstruction is not permitted for structural reasons or other reasons beyond the control of the injured party.

A summary of all damage inspections in Grindavík is now taking place. Emphasis will be placed on finding solutions that ensure fair procedures and equality among the population. As soon as possible, the results of the evaluations will be presented to the owners, who will have the opportunity to express their views before the final decisions are made in their cases, but it is clear that this will not be achieved before the end of the year.

According to the current law on Iceland's natural catastrophe insurance (NTÍ), all fire-insured items (households and personal property) are insured against natural disasters for the same amount as fire insurance at any given time. This means that the property insurance amount is based on the fire compensation assessment. The fire damage assessment of buildings is divided so that 88% of the fire damage assessment is the calculated replacement value of the building (the cost of building a similar house), while 12% of the fire damage assessment is the cost calculated to demolish the building, dispose of building materials and restore the site to its original condition.

The principle is that the injured party must use the insurance compensation he receives from NTÍ to repair or rebuild a house that has been damaged due to a natural disaster. If the insurance compensation is higher than 15% of the insurance amount of the home property or if the damage affects the security of the home property or sanitary practices, NTÍ must ensure that the insurance compensation is properly spent before it is paid to the injured party.

In certain cases, NTÍ is authorized to grant an exemption from the repair and construction obligation, after consultation with the local government, if the condition that 15% is deducted from the compensation amount is met. This mainly applies when the property is deemed ruined by a natural disaster and it is decided not to rebuild it. The deduction is not applied when reconstruction is not allowed for structural reasons or other reasons beyond the control of the injured party.

If compensation is paid out and reconstruction is not allowed, the owner can dispose of the funds as they wish without any obligation to continue living in Grindavík. Damage compensation is paid to the owner after deducting 2% of own risk, deducting 12% of demolition and disposal costs.

It should be noted that the law on NTÍ states that if a decision has been made to grant an exemption from the building obligation and if NTÍ considers the insurance amount to be clearly higher than the market value of the property, the agency is authorized to target the market value of the relevant property. Damage compensation is then paid to the owner after deducting 2% of the own risk, and NTÍ then pays the municipality or others directly for the demolition and disposal of the building.

According to the available information, experts are currently working to assess the situation in Grindavík and NTÍ will not be able to pay out compensation to property owners/victims until that work is completed and the municipality's stance on reconstruction in the area is known.