Car Rental Insurance 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. Discover how rental car insurance works in Iceland.

Car Insurance Company in Iceland

At Iceland Car Rental, all of our rental vehicles come with Collision Damage Waiver (CDW), which is equivalent to the amount stipulated by Icelandic law at any given time. This also applies to the amount of individual driver liability - now it is 220.000 ISK. We strongly recommend more coverage to reduce your liability. Take into consideration that Iceland is prone to extreme weather conditions which can cause damage to your hire car. Without rental car insurance, you would have to pay for this damage out of your own money, which can be very costly. It is in the best interest of our customers to invest wisely in an insurance package that is right for your circumstances.

If you are insured through a third party insurance provider, such as a credit card or insurance company, you will first pay Iceland Car Rental for any damage. You will then get reimbursed through your insurance provider. Adding the insurance below will lower your deductible to 75.000 ISK or 0 ISK.

Our Insurance Packages

At Iceland Car Rental, we offer a range of great insurance deals for your trip to Iceland. Our insurance deals come with more coverage, savings and convenience with our combined packages, which are highlighted below.

Please note that you can also add individual insurance.

Silver discount package

    220.000 ISK
  • Super Collision Damage Waiver(SCDW)
  • Gravel Protection (GP)

Platinumdiscount package

    0.0 ISK
  • Super Collision Damage Waiver (SCDW)
  • Gravel Protection (GP)
  • Tire Protection (TP)
  • Windshield Protection (WP)
  • Theft Protection (THP)
  • Sandstorm Protection (SAAP)

You can also add individual insurance



    Price per day for small / medium car: 1.395 ISK
    Price per day for large / SUV: 2.150 ISK

    Price per day: 1.750 ISK - all cars

    Price per day: 995 ISK  - all cars

    Price per day for small / medium car: 1.895 ISK
    Price per day for large / SUV: 2.595 ISK

    Price per day: 990 ISK  - all cars

Information about insurance

CDW Is Included, But What Is It?

Nearly all car rental companies in Iceland include CDW in the price of your insurance, but this could still cost you if you are involved in an accident. Collision Damage Waiver is a liability waiver, which means the car rental company will not charge you more than a certain amount in the event of damage - in our case 220.000 ISK. Iceland Car Rental also offers a Super Collision Damage Waiver which would only make you liable for 75.000 ISK (541 Eur) in the event of any damage.

What is Gravel Insurance?

Gravel insurance covers you against damage to the car's body and windscreen from stones and gravel. Your car can receive damage due to gravel being thrown by the vehicle in front of you, especially when travelling in some of the more remote locations of the country. Although this isn’t a necessary charge, it is a good addition to have with your insurance in Iceland due to the terrain you will likely be driving on.

Should I Get Premium Insurance?

Although Iceland Car Rental already offers many benefits with our standard insurance package, it is worth considering a premium insurance package to give yourself peace of mind. Some of the benefits of our Platinum insurance package include;

Zero Liability – please note that there are exceptions to what is covered, see examples of this below.
Sandstorm Protection – should you encounter sandstorms during your visit, you will not be charged for any damage.
Theft Protection – this covers the total cost of the car in the event that it is stolen, so you won’t be liable to pay any damages.

Examples of damages that are not included in any insurance:
Damages caused to the underside and the top of the vehicle. This also applies if the vehicle rolls over.
Damages caused when driving off-road or through waters and rivers.
Damages caused by the wind blowing up the door. Review the full list of what is not covered in our Terms.

You can always add insurance when you pick up the car for the same price as online.