Car Rental Insurance in Iceland
Iceland is an incredible country to visit, and when you hire a rental car, you can explore the magnificent lands however you wish. However, the country’s unique geography and unpredictable weather can make the roads difficult to drive, so insurance is essential.
You might be fearful of renting a car in Iceland due to costly insurance mistakes and horror stories - but with the right preparation, it’s actually very simple. Our guide will tell you all you need to know before signing a contract and getting out onto the open road.
The Iceland Car Rental promise: One price, no surprises
Enjoy all-inclusive car rental insurance with zero excess, full transparency, and no hidden fees.
Everything included. No fine print.
When you rent a car with Iceland Car Rental, all mandatory insurance is automatically included in the price. That means:
- Zero excess on all damages
Unlike many rental companies that leave you with a hefty deductible, our company covers the cost of damages included in your insurance. Whether it’s gravel chips, sandstorms, or an unfortunate scrape in a parking lot, you won’t be stuck paying out of pocket. - No hidden costs
Transparency is at the core of our service. The price you see online is the price you pay—no sneaky surcharges, no last-minute “admin fees,” no unpleasant surprises. We want you to start your journey focused on Iceland’s landscapes, not fine print. - No deposit required
Forget about tying up thousands of euros or dollars on your credit card. With us, there’s no deposit. That means more financial freedom for your travels, whether that’s booking extra tours, enjoying local restaurants, or extending your stay. - No confusing upgrades
We keep things simple. Instead of overwhelming you with insurance jargon and upsells at the desk, we bundle everything into one clear, all-inclusive package. What you book online is exactly what you get at pick-up. - Unlimited mileage
Iceland begs to be explored. Whether you want to circle the Ring Road, detour into the Westfjords, or take your time wandering between waterfalls, you can drive as much as you like without ever watching the odometer. Every kilometer is included, free of charge.
What types of car insurance are there in Iceland?
If you’re shopping around, you might be a little confused about the different types of insurance that Iceland car rentals offer. Our all-inclusive insurance covers everything you need to drive confidently in Iceland, which is outlined in the following:
- Collision Damage Waiver (CDW)
Covers damage to the rental vehicle in the event of an accident. - Super Collision Damage Waiver (SCDW)
Reduces your liability to zero. No excess applies to any damage. - Gravel Protection (GP)
Covers damage to the windshield, headlights, or body from gravel. - Sand and Ash Protection (SAAP)
Covers damage caused by volcanic sand or ash — common in Iceland. - Theft Protection (TP)
Covers the unlikely event of vehicle theft.
It is highly recommended to have all of the above when hiring a car in Iceland for ultimate peace of mind.
✔ All of the above are included in every purchase with Iceland Car Rental automatically.
What’s not included in our car insurance?
- Roadside Assistance is not included by default, but can be added during checkout for an extra layer of support in case of breakdowns, flat tires, or battery issues.
- Want complete peace of mind? Add roadside assistance and enjoy coverage all over Iceland, with zero cost and zero deductible for you. Tip: 77% of our rental customers add this for ultimate relaxation on Iceland’s roads!
Why choose all-inclusive insurance?
Driving in Iceland is unforgettable — but it can be unpredictable. Gravel roads, changing weather, and volcanic terrain are part of the adventure. With our no-excess policy, you’re fully covered from the moment you drive off.
No paperwork. No upselling. No stress.
How does it work?
- Book online
Choose your car and dates. All insurance is included in the price, so what you see is what you pay. - Check in digitally
Use our online check-in before arrival to skip the counter and save time. - Pick up and go
Collect your keys from our keybox at KEF Airport and hit the road in minutes.
One simple package. Total coverage
We believe renting a car in Iceland should be easy and honest. That’s why we’ve eliminated confusing insurance tiers and included everything in one simple package so you can focus on the journey, not the fine print.Why choose all-inclusive insurance?
Driving in Iceland is unforgettable — but it can be unpredictable. Gravel roads, changing weather, and volcanic terrain are part of the adventure. With our no-excess policy, you’re fully covered from the moment you drive off.
No paperwork. No upselling. No stress.
How does it work?
1. Book online
Choose your car and dates. All insurance is included in the price — what you see is what you pay.
2. Check in digitally
Use our online check-in before arrival to skip the counter and save time.
3. Pick up and go
Collect your keys from our keybox at KEF Airport and hit the road in minutes.
One simple package. Total coverage
We believe renting a car in Iceland should be easy and honest. That’s why we’ve eliminated confusing insurance tiers and included everything in one simple package — so you can focus on the journey, not the fine print.