A Guide to Car Rental Insurance

Collision Damage Waiver (CDW)

Let’s start with the Collision Damage Waiver, abbreviated to CDW. In the unfortunate event of damage occurring to the rental vehicle, the renter’s liability is reduced to a specified amount which is specified at the time of booking. It’s important to read the small print, however, to be sure of exactly what is and isn’t covered. There is a list of exemptions, and if the damage is caused as a result of one of those, the CDW won’t provide coverage. 

For instance, damage caused by animals is considered outside the policy, as is damage caused to the underside of the vehicle as a result of being driven over rough or uneven road surfaces. Likewise, you can’t claim successfully for damage caused by driving the vehicle over unbridged streams or rivers. Another notable exception is damage caused by wind, for example, if it blows sand, gravel, or ash at the vehicle. 

As you might have realized, some of these are hazards that you’d commonly experience in Iceland. If you plan to head out into the Icelandic countryside, remain aware of what’s around you as well as what other drivers are doing. It’s important to remember that even though Iceland’s remarkable scenery might prove a distraction,  you do need to drive with caution rather than assume the insurance will cover everything.  

Super Collision Damage Waiver (SCDW)

Imagine for a moment that you find yourself in the unfortunate position of being in an accident and the exclusions as detailed in your policy don’t apply. In other words, you’ve stuck to the rules and simply been unlucky. If you’ve only taken out Collision Damage Waiver insurance, the excess (sometimes called a deductible) can still be pretty steep.

It’s worth taking a look at what this amount is. Convert it from ISK to your own currency and think about how you’ll feel if the worst-case scenario happens and that’s the bill you’re faced with. Can you afford to pay out that sum of money? While some drivers may be prepared to take the risk and hope that nothing happens, you may prefer to play it safe and upgrade to SCDW, which reduces the excess (excluding the glass, roof, tires, and underside of the vehicle). You won’t be liable financially so long as it hasn’t occurred as a consequence of one of those exempted causes we previously mentioned.

Theft Protection (TP)

Even in a country as safe as Iceland, thefts can occasionally happen. We include Theft Protection as part of both CDW and SCDW, and the premium is unchanged. Note that this insurance does not cover any of your personal belongings that may have been stolen with or from the vehicle. It’s a good idea to check your own travel insurance to make sure the coverage provided by that policy is adequate. 

Wind and Gravel Protection (WGP)

The wind can be fierce in Iceland. Though inclement weather is most likely from autumn to spring, even in summer, you might sometimes find that conditions deteriorate rapidly. Due to Iceland’s location in the middle of the Atlantic Ocean, windy conditions are par for the course – hang on to those doors! It’s definitely something you’ll need to be aware of before embarking on any road trip.

Gales and the debris they blow around can cause problems anywhere in Iceland, especially wind-prone parts of the country such as South Iceland and the Reykjanes Peninsula where you’ll drive close to lava fields and black sand beaches. In areas such as these, wind-blown sand, ash, loose gravel, and other particulate matter can quickly cause damage to a vehicle. Taking out WGP can reduce your excess to zero and cover damage to paintwork, windows, lights, plastic parts, tires, and rims.

Relaxed Roadside Coverage (RRC)

Accidents aren’t the only problem you might encounter on a road trip. Incidents such as unexpectedly running out of fuel, flatting the battery, or locking the keys inside the vehicle are sadly more common than you might realize. As you stand beside the road or find yourself stranded at a beauty spot, there’s plenty of time for regrets and arguments over whose fault it was in the first place.

Our Relaxed Roadside Coverage is designed to give you peace of mind in precisely those kinds of situations, covering you for callout charges and the cost of towing if that’s deemed necessary. Knowing that help is at hand and those additional expenses will be taken care of is a huge plus and if the worst happens, it won’t ruin your holiday. RRC also covers tire damage.

Insure with us or via a third party? 

These three primary insurance options enable you to tailor-make your package, allowing you to absorb risks that you are comfortable with but have the safety net of coverage for those you aren’t. Our staff will be happy to discuss each of these in more detail so that you can be confident you’re insured in the right way for you. We recommend these policies as they offer premium protection, minimize excess costs, and help to ensure you have a hassle-free journey through Iceland. 

However, we understand that everyone’s needs are different and work towards accommodating what you need. We would remind you, however, that if you intend to use third-party insurance, in the event of damage to the vehicle, we’d still need to charge you in the first instance according to the terms of your rental agreement. You would then need to take the necessary steps yourself to reclaim the amount you’ve paid from your own insurance provider. In our experience, this process can be time-consuming, which is why many of our customers prefer to take out their policies directly with us.

You know the old adage: plan for the worst and hope for the best. Armed with the information we’ve shared in this article, we expect you will now be able to make an educated choice about the type of coverage that best suits your needs and the nature of your trip. Whereabouts you intend to travel could well influence your decision, as will the time of year you intend to visit us – Iceland is a very different destination in winter, of course. We wish you a safe trip that’s memorable for all the right reasons.