Reykjavik Rent a Car Insurance Options

Insurance in Iceland

Car rental insurance is important in Iceland because road and weather conditions can change quickly. Every Reykjavik Rent a Car rental includes basic Collision Damage Waiver, but many travelers choose extra coverage to reduce their excess and make the trip simpler.

Insurance options

We keep our insurance options clear and easy to understand. You can choose the included CDW coverage or upgrade to our Platinum insurance package for broader protection and reduced liability. If you are still choosing your vehicle, browse our car hire in Iceland options before deciding which insurance package fits your route, season, and comfort level.

Included insurance: CDW

Collision Damage Waiver is included with every rental.

Platinum insurance

Our Platinum insurance package gives you the broadest coverage we offer and reduces your excess to 0 ISK. It is designed for travelers who want a simpler rental experience and extra peace of mind when driving in Iceland’s changing road and weather conditions.

Included with Platinum

Platinum includes the main protections travelers usually need when renting a car in Iceland. Here is what each part means:

Collision Damage Waiver (CDW)

Collision Damage Waiver is included with every Reykjavik Rent a Car rental. It reduces your financial responsibility if the rental vehicle is damaged in a collision or accident, up to the excess amount stated in your rental agreement. With the standard included CDW, the excess is 350,000 ISK. With Platinum insurance, the excess is reduced to 0 ISK.

Third Party Liability (TPL)

Third Party Liability covers damage or injury caused to another person, vehicle, or property, according to the terms of the rental agreement. This is part of the basic protection included with your rental.

Gravel Protection (GP)

Gravel Protection helps cover damage caused by loose gravel, such as chips or damage to the vehicle’s bodywork. This is especially useful in Iceland, where gravel sections, loose stones, and rural roads are common outside the city. If your route includes countryside driving, longer day trips, or roads outside Reykjavík, we recommend reading our driving in Iceland guide before you go.

Windshield Protection (WP)

Windshield Protection helps cover damage to the front windscreen caused by stones or gravel. This can be useful in Iceland because small stones may be thrown up by other vehicles, especially on rural roads or in windy conditions.

Theft Protection (THP)

Theft Protection reduces your responsibility if the vehicle is stolen, according to the rental terms. Iceland is generally a safe country, but this protection is still included as part of the Platinum package.

Sandstorm Protection (SAAP)

Sandstorm Protection helps cover damage caused by sand and ash storms. These conditions can happen in certain parts of Iceland, especially in open areas where strong wind can carry sand, ash, or loose material across the road. For more context, read our guide to driving in sandstorms in Iceland.

Tire damage cover

Platinum also includes tire damage cover. This is useful because Icelandic roads can include gravel, sharp stones, rough surfaces, and changing conditions, especially when traveling outside urban areas.

Why choose Platinum?

Platinum is the best option if you want the most complete and convenient insurance package available from Reykjavik Rent a Car. It reduces your excess to 0 ISK, includes the main insurance protections, and gives you better coverage for common Iceland driving risks such as gravel, windscreen damage, tire damage, sand, and ash. With Platinum, you get:

• Excess reduced to 0 ISK
• CDW and TPL included
• Gravel Protection
• Windshield Protection
• Theft Protection
• Sandstorm Protection
• Tire damage cover
• A simpler pickup and drop-off experience Platinum is especially useful if you are planning winter travel, longer road trips, rural routes, or self-drive day trips outside Reykjavík. You can also read our winter car hire guide and our guide to renting a car in Reykjavík for more practical rental advice.

What Platinum does not cover

Platinum gives you our broadest coverage, but no insurance package covers every situation. Some types of damage are still the renter’s responsibility. Examples include:

• Damage to the underside or roof of the vehicle
• Damage caused if the vehicle rolls over
• Damage caused by driving off-road
• Damage caused by driving through rivers or water
• Damage caused by negligence
• Damage caused while driving under the influence For the full list of exclusions, always read our rental terms before driving. You can also check our FAQ for quick answers about insurance and rental conditions.