Is additional fire insurance needed?
Rebuilding costs can vary between properties, regions, and parts of the country. It is difficult to provide precise recommendations on what constitutes a reasonable rebuilding cost, but the following calculator can give you an indication of whether there is reason to purchase additional fire insurance.
As a reference, one can assume an average of ISK 550,000 to 650,000 per square meter for residential housing. However, the cost may be higher or lower.
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Fire insurance value
Information about fire insurance valuation can be found on the website of the Housing and Construction Authority (HMS).
In the Guide to Fire Insurance Valuation published by the Housing and Construction Authority in June 2025, it is stated that fire insurance valuations for housing in Iceland are generally underestimated by 4–8% due to the lack of reassessments following maintenance and renovations.