Eignatjónið var mikið.

The -ið is the definite article, attached to the end of the noun.

So:

• eignatjón = property damage
• eignatjónið = the property damage

This is very common in Icelandic. Instead of putting a separate word like the before the noun, Icelandic often adds the article to the noun itself.

A few similar examples:

• hús = house

• húsið = the house

• barn = child
• barnið = the child

So in Eignatjónið var mikið, the subject is specifically the property damage.

Because mikið has to agree with eignatjónið in gender, number, and here also the basic predicate form.

The noun eignatjón is:

• neuter
• singular

So the adjective must also be neuter singular:

• mikill = masculine
• mikil = feminine
• mikið = neuter

That is why the sentence says:

• Eignatjónið var mikið.

This kind of agreement is a core feature of Icelandic grammar.

Var is the past tense of vera (to be) in the 3rd person singular.

Since eignatjónið is a singular noun, Icelandic uses singular var:

• ég var = I was
• þú varst = you were
• hann/hún/það var = he/she/it was

So:

• Eignatjónið var mikið = The property damage was great/extensive

If the subject were plural, the verb would change:

• Tjónin voru mikil = The damages were great

It is in the nominative case, because it is the subject of the sentence.

In a simple sentence with vera (to be), the thing being described is usually in the nominative:

• Húsið var stórt. = The house was big.
• Barnið var þreytt. = The child was tired.

Likewise:

• Eignatjónið var mikið.

The adjective mikið is not a separate object here; it is a predicate adjective describing the subject.

Yes, it is a compound noun, and compounds are extremely common in Icelandic.

It is made from:

• eign(a)- = property, possessions, assets
• tjón = damage, loss

So eignatjón literally means something like damage to property or property damage.

The first part appears as eigna-, which comes from a form related to eign / eignir. In compounds, Icelandic often uses a linking form like this.

You do not need to analyze every compound while speaking, but recognizing them helps a lot when reading Icelandic.

In this sentence, mikið is not directly attached to the noun inside the noun phrase. It comes after var and works as a predicate adjective.

So the structure is:

• Eignatjónið = the property damage
• var mikið = was great / was extensive

This is different from an attributive adjective, where the adjective stands next to the noun.

Compare:

• hið mikla eignatjón = the great/extensive property damage

  • here the adjective is directly modifying the noun

• eignatjónið var mikið = the property damage was great/extensive

  • here the adjective comes after was

So mikið is correct as written.

A rough English-friendly guide would be:

• Eignatjónið ≈ AYG-na-tyoh-nith
• var ≈ var
• mikið ≈ MIH-kith

A few useful pronunciation notes:

• ei is usually pronounced like ay
• tj in modern Icelandic often sounds somewhat like ty
• ð is like the th in this (though at the end of a word it can be weaker)
• í is a long ee sound

This is only an approximation, but it can help you get started.

Here, mikið means something like:

• great
• extensive
• considerable

With damage, English often prefers extensive or serious rather than literally big, even though mikill/mikil/mikið often corresponds to big, great, or much/a lot depending on context.

So:

• Eignatjónið var mikið
  can be understood as
• The property damage was extensive
• The property damage was great
• There was major property damage

The exact English wording depends on style.

Yes, you could, but it changes the meaning.

• Eignatjónið var mikið = The property damage was extensive
• Eignatjón var mikið = Property damage was extensive / There was extensive property damage

Without -ið, the noun is indefinite. That is often more general or less tied to a specific already-known event.

So the version with -ið sounds more like you are talking about a particular known damage situation.

Because this is a very basic Icelandic main clause, and in simple statements Icelandic often looks quite similar to English:

• Eignatjónið = subject
• var = verb
• mikið = complement

So the pattern is:

• Subject + verb + adjective

This is the same basic pattern as in:

• The house was big.
• Húsið var stórt.

However, Icelandic word order can become more different from English in other sentence types, especially because Icelandic has strong verb-second patterns and richer case marking.

The dictionary forms are:

• eignatjón = property damage
• vera = to be
• mikill = big, great, much

The forms in the sentence are inflected:

• eignatjónið = eignatjón
  • definite article
• var = past tense of vera
• mikið = neuter singular form of mikill

This is a very normal thing in Icelandic: the words you see in a sentence are often not exactly the same as the dictionary headword.