Do you stress out about potential damages when renting a car? Worrying about every little dent and scratches that might cost you an insane amount of money? You’re not alone. 

Many people feel the same way, but there’s no need to panic. In this article, I’m going to go over car rental insurance in Iceland and how you can have a carefree car rental experience in the land of ice and fire.

Most Common Car Rental Damages

I’ve been in the car rental business for over a decade and seen just about everything that can go wrong when people rent cars in Iceland. So, let’s go over some of the most typical damages customers get charged for.

Chips on the windshield are the most common damage for cars in Iceland. This is a kind of damage that can happen to anyone anywhere and although small they are quite expensive. The only real solution to this issue is having insurance.

Damages caused by wind are also common. Iceland is a windy place, and it can cause serious damages to rental cars. This includes damages to doors caught by the wind and sandstorms. Both are extremely expensive when not insured.

Iceland is quite expensive, and repair costs are certainly no exception. So, the more serious the damages are, the more expensive it is.

Drivers also have to factor that conditions in Iceland can be challenging. Even for the most experienced drivers. Issues like getting stuck in snow or even worse in a river can happen and then you do not want to be left uninsured.

Car Rental Insurance in Iceland: Common practice

Perhaps the most important question is how are insurances for car rentals in Iceland?

They can of course vary in terms of what insurances each company offers customers. Same goes for terms and conditions as in what is the customer responsible for and the amount charged in case of damages.

Most car rentals in Iceland include some form of collision damage waiver or CDW in their contract. That is there is a standard insurance on each rental with an excess amount attached to it. What this standard insurance covers are listed in the terms of the rental agreement.

CDW insurance usually does not cover damages such as windshield, tires, underside, water and wind related damages. As well as all damages caused by negligence from the rental. Such as driving while intoxicated, off road driving and driving on closed roads.

Iceland's Third Party Liability Insurance

Third party liability insurance is mandatory by Icelandic law. Therefore, car rental companies are required to have it. Meaning it is always applied to the rental car and customers do not need to buy it separately and cannot waive it.

The third-party insurance covers all injury to others, damage to other cars and property. The excess amount set from the car rental company in Iceland is then stipulated by law and listed in the rental agreement.

Insurances for my Car Rental in Iceland

There are many different types of insurance you can get for your car rental in Iceland. Some car rental companies offer extra insurance to reduce the excess liability for damages while others offer full coverage insurance.

This can be present in different ways as some car rentals in Iceland offer each insurance separately, like gravel protection, extra collision damage waiver, sand protection, tire insurance and so on. Usually there are some packages which include a bundle of these insurances.

In my experience I recommend always opting for full coverage insurance as you never know what can happen. Especially when driving in a new country where you are not used to the road conditions.

Waving insurance from Iceland’s Car Rentals

It is possible to rent a car in Iceland without having insurance from the car rental company. This is often requested when customers have their own insurance that requires them to waive all other insurances.

However, by doing so customers must pay a full repair cost for any damage and claim that amount from their own insurances. With Iceland’s high repair cost these amounts can be extreme. It is also worth noticing that customers cannot waive the third party liability insurance.

Terms of insurances

It’s very important to know the terms of insurance for your car rental in Iceland. See what is actually covered by the insurances and what is not. This can vary between car rentals.

Here are some items that might not be covered by insurance.

•         Roadside assistance
•         Sand and ash damages
•         Tires and wheels
•         Water damages

Also check if the car rental holds any amount as a guarantee. If so, what’s the amount and how will the insurance affect it?

In Conclusion

Iceland is an amazing place and the best way to explore it is by having a rental car. However, it is the land of ice and fire and mixed in with its beautiful scenery and natural wonders are challenging road conditions.

Here you are battling the element every day. Repair cost is high and you don’t want a small rock or sudden gust of wind ruining our vacation. Therefore, I highly recommend having full coverage insurances for your car rental in Iceland.

Take time to seek information about the insurances offered and don’t be afraid to ask about them if anything is unclear. Have a carefree experience and enjoy all that Iceland has to offer without stressing out about your rental car.

If you liked to learn more about Iceland please visit our blog for useful travel tips under Practical Info and Driving in Iceland. 

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