You're going to rent a car in Iceland and don't want any nasty surprises. So, it is useful to insure your rental car properly. We’ll tell you a bit more about some surprises you could run into and how to avoid them.
Want to be sure your rental car is properly insured in Iceland?
Read below to find out what you need or compare insurance policies directly via our platform.
All-Risk Insurance in Iceland: Know Where You Stand
All-risk insurance in Iceland works slightly differently than you may be used to. This isn't a problem, but it's helpful to know in advance!
Due to Iceland's unique natural conditions, most rental companies offer specific insurance packages.
Here are some special Icelandic risks that deserve extra attention:
- Volcanic ash — part of Iceland's natural charm;
- Flying gravel, which occurs on adventurous routes;
- Sand particles, especially in beautiful desert areas;
- Wind force: Can be powerful in this dynamic country.
When picking up your rental car, you can easily purchase additional insurance to protect against these conditions. This way, you are fully protected against the island's natural elements.
Check the exact coverage of your insurance and the additional options available in the rental company's terms and conditions.
Ash, gravel and sand
The roads in Iceland, including the main roads, are not completely paved. The asphalt can suddenly turn into a gravel road with sand, gravel, potholes and bumps. Also, the roads from the main road to the attractions are usually not paved. If you drive carefully to those places and avoid the potholes and bumps, you can drive a 'normal' car here.
Sandstorms, ash (volcano) and splashing gravel can cause damage to the car. This damage is excluded from cover by most insurance companies. Rental companies then offer additional insurance to cover this damage, but there is still an excess of sometimes well over €900 (about 1100 USD). In most cases, this extra insurance will therefore not pay off.
Driving through fordable places
During the summer months, it is possible to explore the interior of Iceland with a suitable 4x4. On your route, you can then encounter so-called 'fordable places'. Many insurances exclude damage caused by driving through water. The rental companies offer separate insurance for such damage, but the excess cannot be insured.
CAUTION:
Damage caused by driving through a river is not covered by any insurance. So always check the water level of a crossing before entering the water.
Wind insurance
Yes, you read it correctly: wind insurance. In Iceland it can sometimes blow so hard that when you open the door of the car, the wind gets hold of it and takes it with you. This too is an insurance that rental companies can offer you extra.
Tip:
In case of damage due to an accident or traffic violation, the insurance always requires a police report.
During our travels we have rented dozens of cars in different countries on different continents, without any problem! On this page you'll find our best tips on renting a car, so you can also have a carefree road trip. Road Trip Car has a handy checklist, so you can be sure to check the most important points when you pick up your rental car. You can download it for free from the same article!
Which rental companies can I contact?
You now know what it’s like to insure a rental car in Iceland. In the meantime, you probably want to go on an adventure with the perfect rental car as soon as possible! At Road Trip Car we have made this a lot easier for you.
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