The First Cars

The first cars arrived in Iceland at the beginning of the last century. In the summer of 1904, Dethlev Thomsen, consul and merchant, attempted to use such means of transport in Iceland, but he received a grant from Alþingi to transport a car to Iceland. On June 20th of that year, he imported the "Thomsen car" to Iceland. He proved to be engineless and failing and was deported the following summer. The same story can be told about an attempt to operate an automobile made in North Iceland in 1907, when the "Grundarbíll" was imported. In 1913, four automobiles were transported to Iceland, and since that time automobile traffic has never ceased in Iceland.[1]

Large-scale car ownership

Icelandic car ownership has increased considerably since the beginning of the last century. Between 1916 and 1925 466 automobiles were imported to Iceland and between 1926 and 1930 1383 automobiles were imported to Iceland.[2] In 1990 there were 134,181 registered cars in Iceland, but in 2000 this number had risen to 180,041.  See the table below for developments from 2000 to 2018, with over 300,000 registered vehicles in Iceland (data from Statistics Iceland).

This great expansion of the vehicle fleet has greatly increased traffic on the country's roads and thereby the risk of accidents caused by them.

Increase in traffic accidents

The number of traffic accidents has increased steadily following the enlargement of the vehicle fleet in Iceland. With increasing speed, the number of serious accidents has also increased. In the last 10 years, the number of fatal accidents has generally decreased, see table below (data from Statistics Iceland).

But you can't say that about the number of injuries in the last 30-40 years. Although the number of injuries each year varies, there is a marked increase from 1981 and 1990 (data from Statistics Iceland).

Although the cost of sacrifice is high and the consequences are far-reaching, an automobile is one of the world's leading means of transportation.

Major consequences

There are many reasons for the increase in road accidents, but their consequences are very clear and varied. People are injured and may miss work, temporarily or permanently, and suffer loss of income. Cars are damaged with associated costs. Each road accident can incur high costs for insurance companies (which pay the compensation), but an increase in road accidents can lead to premium increases. These are just a few examples of the consequences of road accidents. Nor should we forget the mental suffering that people often suffer as a result of accidents, both the injured and their families.

The need for automobile insurance

Automobile insurance is necessary, among other things, for a society to benefit from the advantages of an automobile. The main reason for this is that every traffic accident involves high costs, and if a car owner had to pay damages directly out of his own pocket, there would not be as much car ownership here as there really is. The legislature is clearly of this opinion, as the insurance obligation of cars is stipulated in law, now the Traffic Act, but from 1 January 2020 the obligation is contained in the Motor Insurance Act no. 30/2019. It stipulates the obligation of the car owner to purchase liability insurance as well as accident insurance for the driver and owner. These compulsory insurance, liability and compensation rights will be discussed in more detail in future columns.


[1]Kristinn Snæland: Cars in Iceland in pictures and language 1904 – 1922, pp. 11 – 30.

[2]Örnólfur Thorlacius: The beginning of the automotive age in Iceland. In David Burgess Wise: Old Cars, pp. 156-158.