Insurance in Iceland

All of our rental vehicles come with Collision Damage Waiver (CDW) 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 insurance you would have to pay for this damage out of your own pocket and be left with a huge cost. We truly believe it is in the best interest for our customers to invest wisely for insurance that are right for their 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 and then get reimbursed through your insurance provider. Adding the insurance below will lower your decuctible to 75.000 ISK or 0 ISK.

Our Insurance Packages

We offer great insurance deals with more coverage, savings and convenience with our combined packages.


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 Super Collision Damage Waiver which would only make you liable for 75.000 ISK (541 Eur) in the event of any damage.

Is Gravel Insurance Necessary?

Although this isn’t a necessary charge, it is a good addition to have with your insurance in Iceland. 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. 

Is It Worth Taking Premium Insurance?

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

Zero Liability – please not 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.