This is the preliminary version of the article. We hope to add more policy providers in the near future, particularly for our US-based friends. plowshare with us what you find to be the best value-for-money car rental policy for Iceland in the comments, in our FB group, or write us an e-mail !
Me, you, and credibly 99.9 % of early icelandic visitors have already wondered, how to choose the best insurance for their car rental in Iceland. The undertaking is not easy, because indemnity options vary widely and are not unified across car rental providers. There are, however, multiple common features for every car rental insurance. The same applies to park threats. therefore let ’ s summarize all of these and then look at the available options .

TLDR – tell me the best policy !

To simplify it the most, if you prefer full coverage, I suggest the succeed :
Compare the price and the content of the full ( a.k.a. “ platinum ” ) indemnity offered by your icelandic car rental company to Lotus and RentalCover below and choose for yourself. personally, we constantly use Lotus or RentalCover. These two offer the best floor of insurance for a price ( normally ) comparable with anyone else :

  • Lotus car rental with their Platinum insurance covers EVERYTHING including river crossings. You can support us by using a 5% discount for Lotus with promo code: epicicelandd5
  • RentalCover, a top-notch external insurer insures you against everything except river crossings, usually for a much lower price compared to the car rental companies

beware ! even platinum policy packages most of the time don’t cover water damage / river cross ( we know only of 1 company that does ), and evening many other damage types like undercarriage or doors and windows .
For case, as of 1.6.2021, one of the most popular car rental companies in Iceland offers platinum indemnity for a 7-day Dacia Duster tripper for 300USD. however, their platinum indemnity does NOT cover :
-undercarriage, wind, tires, windows, water damages
You can have a better level of coverage for a lower price with RentalCover. RentalCover ’ s 4×4 indemnity ( for non-US citizens ) covers everything except river crossings for, in this case, 240USD / 200Eur .

iceland car insurance

A full picture is not that slowly though, there are more things to consider. Don ’ deoxythymidine monophosphate want to buy full Icelandic cable car lease insurance ? Or do you precisely want to understand the details ? Well my acquaintance, then read below…

What are the risks of a car lease in Iceland ?

  1. Collision – damages to your car
  2. Collision – damages to someone else’s car
  3. Someone steals your car
  4. Loose gravel hits your car
  5. Sand or ash damages your car (engine or anything else)
  6. You damage the undercarriage / chassis of your car
  7. You damage the tire
  8. You damage the windows
  9. You damage the doors (e.g.: wind overthrows them)
  10. Water damages your car (engine or anything else)
  11. Animals damage your car
  12. Car can’t move and you need towing

Yes, all of this can actually happen when you drive in Iceland. Yes, all of this is normally charged individually ( excluded from the basic insurance ). Is it likely it will happen ? Well, most of the time no, but this obviously depends on your driving skills. One thing is certain – there are more threats on Icelandic roads than on a distinctive american english / european road ( I said typical, for certain there are some more dangerous roads ) .
authoritative : How to choose the best car for Iceland ?
indeed do we fair want to scare you so that you buy our policy ? No 🙂 It ’ second merely good to be organize and set the expectations right so that you can choose for yourself .
Best car rental insurance in Iceland: 2022 guide

What types of insurance are in Iceland ?

Rule number one – always check the policy conditions of your cable car lease company ! Too difficult to understand ? Well, obviously… But, what you can broadly expect is the following :

  • What’s included in the basic price is usually only the compulsory insurance (see below)
  • For some of the damages not included in compulsory insurance, you may buy an optional insurance

compulsory policy

There are two types of insurance that are compulsory for every car rental ship’s company in Iceland. This basically means you will constantly get these two included in the basic price :

  • Collision damage waiver
  • Third-Party Liability Insurance

1. The collision damage waiver (CDW)

The CDW covers costs for character ( 1 ) – damages to your car if there ’ s a collision. BUT. Almost always you have to pay as well. This is called “ the deductible ”, “ the driver ’ second liability ” or “ the surfeit ”. So the usual example goes like this : there ’ s a CDW with 300 000 ISK deductible, which means, you will pay ALL damages up to 300 000 ISK ( 2350 USD ). If the wrong is bigger, you will not pay the rest .
second, the CDW will normally not cover many types of damages. normally, all of the bullet train points ( 3 ) to ( 12 ) above are not covered. To insure against them, you have to either buy optional policy or buy wholly unlike indemnity .

2. The third-party liability insurance (TPL)

The TPL covers costs for subject ( 2 ) – damages to person else ’ south car if there ’ s a collision. You don ’ thymine pay anything in this case. These damages are covered by TPL .
car rental iceland insurance

optional policy

well, we ’ ve covered 2 cases out of 12 so far, what about the pillow ? Car rental companies offer to cover SOME of those as optional policy. The bible “ some ” is very significant here because entirely very few companies cover most of them and we know merely of 1 car lease ship’s company which covers all of them .

What are the typical optional insurance options in Iceland ?

1. The super collision damage waiver (SCDW)

Do you remember how we talked about “ the deductible ”, “ the driver ’ sulfur indebtedness ” or “ the excess ” ? That ’ s the money you may pay if you damage your rental car. The SCDW lowers this come. If you buy this optional indemnity, you will pay a lower ( sometimes even zero ) deductible in case of an accident .

3. The theft protection (TP)

This covers costs for encase ( 3 ), i.e. person stealing your car. normally, there is no deductible, so you normally don ’ thyroxine yield anything if it happens. It ’ second deserving mention, though, that car thefts are identical rare in Iceland .

4. The gravel protection (GP)

If I had to take merely one optional indemnity in Iceland, it would be annoy protection. Gravel is everywhere in Iceland. And most of the gravel is on F-roads. Which you should see because they are beautiful ! This is the type of damage that happens about constantly. so good be insured against it 🙂

5. The sand and ash protection (SAAP)

Although this sounds like indemnity against volcanic ash, that is not its main determination. There are several sand fields in Iceland, most of them in the South. They are largely exposed to the wind after the snow thaw, i.e. in February, March, and April. immediately imagine what happens if the hoist blows adequate backbone into your engine ? Nothing good 🙂 That ’ s where the SAAP comes in. Do you need it in summer ? normally no, but no one can rule out that sandpaper will get into your engine in some cases .
Some cable car rental companies offer more optional indemnity, but for the typical company, the list normally ends here. so, we ’ ve covered 5 out of 12 cases now ! What about the rest ?
significant : How to choose the best cable car for Iceland ?

These are the less typical optional insurance options in Iceland :

6. The undercarriage / chassis insurance

Imagine drive over big rocks on some of the F-roads, for model when heading to Askja. It ’ s not that hard to hit the undercarriage, a.k.a. chassis of your fomite and to damage it. Most of the indemnity packages do not cover this ! You have to either buy the optional undercarriage policy or buy different indemnity that will cover that .

7. The bore policy

unfortunately, even damage to tires is excluded from basic insurance packages most of the time. This means, should anything happen to your run down ( or sometimes even a bicycle ), you will be amply responsible for that. Unless you buy optional indemnity or different indemnity which will cover all of these .

8. The windowpane policy

The like applies to windows. This is normally a separate “ indemnity item ”. That means, anything happens to windows – you are fully responsible for that and will pay for that. Unless you buy optional indemnity or different policy which will cover all of these .

9. The door insurance

even doors are normally excluded from basic insurance and tied many optional insurance packages. The price to doors is pretty coarse in Iceland, by and large ascribable to strong wind and people not taking adequate care when open and closing their doors. You may insure against the doorway damage by buying optional indemnity or different indemnity which will cover all of these .

10. The urine policy

If you want to drive F-roads with river crossings, this is one of the most important points. Car rental companies don’t cover water damage, not even in their platinum packages ! As of now, we know alone about Lotus cable car rental, which does cover water price .
What does this beggarly ? Well, if you cross the river on an F-road, and let ’ s say the water gets into your locomotive, your engine may die. And you may remain stick in the water system. And you will be paying for towing + fresh locomotive. How much can a new locomotive cost ? Well, easily even 10 000 USD !
A PROMO CODE epicicelandd5 will get you a 5 % dismiss with Lotus and us a little mission at no excess price to you .
“ thus what should I do ? ? ” Well, either go for Lotus with water indemnity ( and, please, evening in this case study cautiously the river crossings ! ! ) or take special caution and try to avoid bigger river crossings. We wrote a list of all F-roads with the size of their river crossings described ( this may change in time though ! constantly check conditions at the prison term of your trip ) .
road 63 bildudalsvegur

11. The animal meet insurance

Yes, this doesn ’ t happen often, but seldom it does. During our trip, we ’ vitamin d actually met more sheep than tourists 🙂 And sheep much wear ’ metric ton act logically, some being very stubborn getting at the road at the most inconvenient time. This, in the inaugural invest, means, take special care not to harm animals in Iceland !
If, in any case, an animal damages your car somehow ( hopefully nothing happens to the animal, let ’ s rather visualize a scenario of an angry sheep scratching your car ), you will be amply responsible for that. Unless you buy optional policy or different insurance which will cover all of these .

12. The tow insurance

Got stuck in the river ? Stuck on the rock candy ? Stuck in the sand ? Is your engine dead ? Did you collide and your car can ’ t be active ? You will need towing. And towing international relations and security network ’ t bum. And is charged individually. Unless you buy optional indemnity or different insurance which will cover all of these .
iceland car rental insurance

What policy should I choose ?

The most common damages

now, if you read all of this, hera ’ s a little wages for you 🙂 What is in our impression the most park damage happening to rental cars in Iceland ? Well, if I had to pick Top 3, it would be 1 ) annoy damage, 2 ) water damage ( if you go for F-roads with river crossings ), 3 ) classical collision of any kind .
What happens less much, but still happens are the door price ( due to wind ), run down damage ( of path tires are under pressure on Icelandic roads, though this international relations and security network ’ t that expensive price ), and damage to the undercarriage of your car ( if you aren ’ thymine careful adequate ) .
What normally does not happen are thefts, animal encounters or window damages, and sand/ash getting into your engine outside of jump .

Trip scenarios

Reykjavik and south

Going good around Reykjavik, golden circle, and the south ? Well, then you don ’ t need the body of water damage indemnity. besides, annoy hitting your car, you damaging the undercarriage, or animals damaging your car are not very likely. Of class, anything may happen, though .
This means that normally, good basic compulsory policy is enough. For peace of heed, you may take Gravel protection, Sand and Ash protection, and/or Super collision damage waiver if you feel diffident. Look at RentalCover how much they charge for indemnity – it may be cheaper than buying policy from your car rental company and cover you better .
normally cheaper RentalCover will cover everything except water damage .

Ring road or winter slip

The call road is long and winter is more dangerous, so I would by and large recommend slenderly better insurance. It ’ sulfur better to have Gravel protection, Sand and Ash protection, and Super collision damage waiver. Some other options like Tire policy, Window insurance, Door insurance or Towing policy may be viable for your peace of thinker as well, not necessity though. If you are not going for F-roads, water insurance is unnecessary .

Highlands with childlike F-roads

Going for highlands, F-roads, and perplex roads with no or just belittled river crossings ? well, then you probably need to be insured against everything mentioned in the article, except river crossings ( water wrong ) .
I suggest you first read well full/platinum policy conditions of your car rental company. If they include all of the damages I mentioned in the article ( normally they don ’ t ), then compare their price against RentalCover. This external provider covers everything except water wrong for a very well price .
Want to have covered everything, including water damage ? Lotus cable car rental will cover it with their platinum policy !

Highlands with more unmanageable F-roads

Going for highlands, F-roads, and gravel roads with metier river crossings ? Get all available insurance, especially the one for water damage, undercarriage, and annoy !
There ’ s only 1 car rental company which we know about, that covers you against everything mentioned in this article, including river intersect. That is Lotus car rental. You can have a 5% discount for booking with them with our promo code : “ epicicelandd5 “
alternatively, you may take limited caution, avoid big river crossings and go for an indemnity package without body of water insurance. In that lawsuit, I suggest you first read well full/platinum indemnity conditions of your car rental caller. If they include all of the damages I mentioned in the article ( normally they don ’ thymine ), then compare their price against RentalCover. This external provider covers everything except body of water damage for a very good price .
How to find out which roads have unmanageable river crossings ? We ’ ve made a tilt of F-roads for you !

How does RentalCover work ?

RentalCover is, in our opinion, the best 3rd party insurance supplier for car rentals around the earth, who will insure your icelandic car rental .
You need to buy indemnity any day BEFORE the trip. If any accident or damage happens during your trip, this is the procedure to follow :

  1. Create documentation of the accident (photos, notes)
  2. Notify your car rental company immediately
  3. Pay for the damages to your car rental company – require confirmation for that!
  4. Send the documentation (photos, notes, your written communication with car rental company, confirmation of your payment) to RentalCover
  5. RentalCover will pay you for the damage

The main advantage of a third-party supplier like RentalCover is most of the time the better price and better insurance coverage.

The chief disadvantage is that you have to pay for the damage first, and you will get the money back subsequently .

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