Not clear who would cover the damages
Hulda Ragnheiður Árnadóttir and Jón Gunnar Ásbjörnsson. It is not clear who would cover damages to pipe infrastructure in building in the case of an eruption and the Svartsengi powerplant would not produce hot water. Composite image/
Hulda Ragnheiður Árnadóttir, director of the Icelandic Nature Disaster Insurance, tells mbl.is that the Nature Disaster Insurance would not need to cover the damage that would occur if water pipes in houses were damaged if hot water stoppeding toburk due to a possible eruption near Svartsengi powerplant.
Jón Gunnar Ásbjörnsson, a lawyer at the Landslög law office, believes this is not that clear cut.
There are serious concerns that the entirety of the Reykjanes peninsula will be without hot water if the power plant at Svartsengi and its operations are cancelled due to a possible eruption in the area.
Regardless of all the problems that would arise if you didn’t get hot water, there is also the danger that water would freeze in the waterpipes and explode if hot water stopped passing through them.
This would result in a large financial loss.
Says the damage is indirect
When asked if the Icelandic Nature Disaster Insurance covers damage that could occur in water pipes in people's houses, because of this, Árnadóttir says that it is indirect damage as this would be a result of the power plant stopping to function.
She says that natural disaster insurance only compensates for direct property damage.
“This is not covered by Iceland’s Nature Disaster Insurance,” she says.
Considers it likely that natural disaster insurance will need to cover such damage
However, Ásbjörnsson considers it likely that damage to indoor pipes in these circumstances will be covered by natural disaster insurance.
He says that indoor pipe system in buildings are covered by compulsory insurance, since the buildings are part of or ancillary to the property. Houses, furniture and other valuables, which are fire-insured by an insurance company with an Icelandic licence, are insured against natural disasters.
“This relates directly to the case scenario of an eruption,” he says. “When you have a part that is covered by compulsory insurance that suffers damages because of events that are covered, such as a volcano, I don’t see that it’s anything other than direct damages that are covered,” he says, adding:
“I believe that the exclusion of direct damage in the law on natural disaster insurance excludes indirect damage such as damage due to loss of use, loss of profits and the like, rather than damage to the property itself.”
Svartsengi powerplant. mbl.is/Hákon
