TL;DR: Blue car rental complete guide to insurance and winter readiness
Driving in Iceland is beautiful but unpredictable, especially for first-time visitors. Sudden wind gusts, gravel roads, icy conditions, and volcanic ash can make driving a true challenge. That’s why having the right car rental insurance in Iceland is essential.
To make your trip worry-free, Blue Car Rental offers a comprehensive Zero-Excess Insurance Bundle that reduces your deductible to 0 ISK and includes Sand & Ash Protection (SAAP). This means you’re protected against the most common local risks, gravel impact, strong winds, and volcanic debris.
If you prefer, SAAP can also be added separately. During the winter months, every Blue vehicle comes equipped with studded winter tires, full 24/7 roadside assistance, and fast online check-in to minimize waiting time at pickup.
Always check road conditions, weather reports, and wind forecasts before driving, especially when planning routes along Iceland’s Ring Road or the South Coast. These extra steps, and the right insurance, help make your self-drive adventure safer and more enjoyable.
Key Features
- Zero-excess coverage (Liability Waiver) available on all rentals.
- SAAP included in the bundle or available separately.
- Studded winter tires (Nov–Apr) for all vehicles.
- 24/7 roadside assistance across Iceland.
- Online check-in and key-box pickup options.
Why Insurance in Iceland Is Different
Iceland’s landscapes are stunning, but they come with challenges that most travelers don’t face elsewhere. Strong winds, gravel roads, volcanic ash, and quick weather shifts make insurance essential.
With Blue Car Rental, your coverage options are built for these local realities. Every plan can be tailored to your trip, whether you’re driving the Ring Road, exploring the South Coast, or heading into the Westfjords.
Even other rental agencies like Reykjavik Rent a Car highlight the importance of reading insurance terms carefully and understanding Iceland’s unpredictable terrain. The goal is always the same: protect your experience and avoid surprises.
The Blue Baseline: What’s Already Included
Every rental with Blue comes with a strong foundation that gives travelers peace of mind right from the start. Unlike many other car rental companies, Blue Car Rental builds its base coverage around Iceland’s unique driving environment, gravel roads, strong winds, and unpredictable weather.
Before you even hit the road, you already have several layers of protection included. This ensures that every traveler, from first-timers to seasoned adventurers, can explore Iceland confidently, knowing that essential coverages are already in place.
- CDW + SCDW: Collision and super collision coverage with reduced deductibles.
- Gravel Protection (GP): Covers windshield, headlights, and paint.
- Theft Protection (TP): Standard inclusion.
- Third-Party Liability: Required by Icelandic law.
The default deductible is 90,000 ISK for smaller cars and 120,000 ISK for SUVs and vans. With only CDW, that deductible rises to 350,000 ISK. These inclusions make Blue’s standard plan more complete than most entry-level offers on the market.
Zero-Excess Insurance Bundle (Liability Waiver)
The Liability Waiver is Blue’s all-in-one protection plan designed for travelers who want total peace of mind on Iceland’s unpredictable roads. It doesn’t just simplify your coverage, it transforms the way you travel. With this upgrade, your deductible drops to 0 ISK, and Sand & Ash Protection is automatically included. That means you can drive through Iceland’s ever-changing weather, from volcanic plains to windy coastal roads, without worrying about the unexpected. It also adds coverage for a wide range of risks that often surprise travelers, ensuring you stay focused on adventure, not damage costs.
What It Covers
- All standard inclusions (CDW, SCDW, GP, TP)
- Sand & Ash Protection (SAAP)
- Wind-blown door damage
- Undercarriage and water splash damage (not off-road rivers)
- Tire damage
What It Costs
- Small cars: 4,450 ISK/day
- Medium cars: 5,650 ISK/day
- Large cars: 6,050 ISK/day
Note: Insurance must be added before pickup.
If you’re planning long drives or visiting during unpredictable seasons, this package is the simplest way to travel without worry. Competitors like Zero Car also emphasize how a zero-excess plan brings peace of mind on Iceland’s wild roads.
Sand & Ash Protection (SAAP)
Sand and volcanic ash can quickly wreak havoc on your rental car’s exterior—scratching paint, pitting glass, and dulling headlights within minutes. Along Iceland’s South Coast, particularly near black sands like Reynisfjara beach and Skaftafell, strong winds can carry fine volcanic dust that acts like sandpaper against your vehicle’s surface. This is why Sand and Ash Protection (SAAP) is such a vital part of car rental insurance in Iceland. It shields you from the expensive costs of abrasive damage that standard insurance doesn’t cover, ensuring your trip remains smooth, scenic, and stress-free.
- Deductible: 90,000 ISK
- Price: 1,850 ISK/day
- Included in the Liability Waiver or as an add-on before pickup.
It’s a small daily cost that can save you a big bill later. Even Iceland Car Rental recommends protecting against natural elements, noting how abrasive sand and ash can be during high winds.
When to Add SAAP Alone
If you decide not to choose the full Zero-Excess Insurance Bundle, adding Sand and Ash Protection (SAAP) becomes especially important. It’s the smart middle ground for travelers who want peace of mind without paying for the complete package. SAAP is essential when:
- Driving along the South Coast.
- Visiting during spring or autumn when surfaces are dry and winds are strong.
- Planning routes through open, volcanic landscapes.
You’ll still have a 90,000 ISK deductible, but your exposure to the most common type of Icelandic damage will be covered.
Our Winter Readiness Commitment
Winter driving in Iceland can be magical, but it’s demanding. Blue prepares every car and customer with safety in mind.
1. Studded Winter Tires
From November to April, every vehicle is equipped with studded or winter-grade tires for better grip on ice and snow. This makes self-drives possible even during darker months.
2. 24/7 Assistance
Blue provides full around-the-clock roadside support, from towing to flat-tire help. With the Roadside Assistance Waiver, these call-outs cost 0 ISK.
3. Fast Pickup
Online check-in and key-box collection reduce waiting time at KEF Airport. That’s part of our Zero Worries policy—less time in the cold, more time on the road.
4. Driving Guidance
Blue maintains a full winter driving guide and monthly safety updates so you can plan routes and avoid risk zones.
Choosing the Right Protection: Quick Guide
Scenario A: I want full peace of mind
Take the Liability Waiver. You’ll have zero deductible and full coverage for gravel, ash, wind-blown doors, and more.
Scenario B: I’m on a budget but driving the South Coast
Keep the default coverage and add SAAP. You’ll have limited liability (90,000 ISK) but be protected against the most expensive type of damage.
Scenario C: I’m staying around Reykjavík in winter
City driving still involves icy roads and wind gusts. Choose the Liability Waiver for simplicity and protection.
Scenario D: I’m exploring the Highlands or remote areas
The Highlands bring challenging terrain and isolated roads. Add the Liability Waiver for total protection and pair it with Roadside Assistance Waiver. This combination ensures zero-cost help if you get stuck or need towing in remote areas.
Scenario E: I’m taking a short summer trip around the Golden Circle
For short, well-paved routes in summer, the standard SCDW coverage with Gravel Protection is usually enough. Add SAAP if the forecast includes strong winds or dust warnings.
|
Scenario |
Best Option |
Key Benefits |
Recommended Add-ons |
|
A. Full peace of mind |
Liability Waiver |
0 ISK deductible, full coverage |
SAAP included |
|
B. Budget + South Coast |
SAAP only |
Covers ash and sand damage |
Optional Roadside Waiver |
|
C. Reykjavík in winter |
Liability Waiver |
Full winter protection |
24/7 Assistance included |
|
D. Highlands / Remote |
Liability Waiver + Roadside |
Full coverage, towing, safety |
GPS + tire check advised |
|
E. Golden Circle summer |
SCDW + GP (+SAAP optional) |
Basic cover for short, paved trips |
SAAP for windy conditions |
Daily Driving Checklist
Before you head out each day, take a moment to prepare properly. Iceland’s weather can shift within minutes—from clear skies to sudden rain, snow, or powerful gusts of wind. A quick safety check each morning can make the difference between a smooth drive and an unexpected delay. Use this short checklist to help plan your route, check the latest updates, and stay safe wherever you’re heading:
Car rental tip: Red or orange alerts usually mean: don’t drive.
Real-Life Scenarios
Wind gust slams a door → Sudden Icelandic winds are no joke—doors can fling open with force, causing dents or broken hinges. With the Liability Waiver, this kind of wind-blown door damage is fully covered with 0 ISK deductible, letting you enjoy the view without stress.
Sandstorm near Vík damages paint → On the South Coast, powerful sand and ash storms can leave your car’s paint and glass severely scratched in minutes. With Sand and Ash Protection (SAAP) or the Zero-Excess Insurance Bundle, these costs are completely covered, giving you full peace of mind while exploring dramatic areas like Skaftafell and Mýrdalssandur.
Gravel hits windshield → Driving on Iceland’s many gravel roads often means small stones are flung by passing cars. Luckily, Gravel Protection (GP) is automatically included with every Blue rental, covering windshield, headlight, and paint damage so you can focus on your adventure, not the repair bill.
What’s Not Covered
No insurance, even the most comprehensive, can protect against every possible situation. It’s important to understand the limits of your coverage so you can drive responsibly and avoid unexpected costs. For instance, insurance doesn’t apply when damage results from misuse or risky behavior, so taking care on Iceland’s challenging roads is just as vital as choosing the right policy.
No insurance covers:
- Negligence or reckless driving.
- Off-road travel or unapproved routes.
- Driving under the influence.
- Wrong fuel use or mechanical misuse.
Optional: add the Roadside Assistance Waiver to avoid service call fees for towing or getting stuck.
Related Reading from Blue Car Rental
Exploring Iceland safely takes more than just the right insurance—it also means understanding the country’s unique driving conditions and seasonal challenges. Blue Car Rental offers a wide range of practical guides and local insights to help travelers plan smarter, drive safer, and get the most out of their trip. Below are a few of our most useful articles for preparing your Icelandic road adventure:
- Driving in Iceland in winter: complete guide
- Winter driving month-by-month
- Why you need insurance in Iceland
- Everything about Icelandic roads
- Do I need winter tires?
Each of these articles dives deeper into topics covered here—from choosing the right tires to understanding local road rules—so you can feel fully prepared before hitting the road. Whether you’re planning a summer loop around the Ring Road or a winter escape through the snow, these resources will help make your Iceland experience smoother, safer, and more enjoyable.
How to Choose Coverage in 3 Steps
Choosing the right car rental insurance in Iceland can feel confusing, especially with so many unique weather and road conditions to consider. This quick three-step guide breaks it down in a way that’s simple and practical—helping you pick the coverage that truly fits your trip. Whether you’re planning a drive around the Ring Road, a weekend in Reykjavík, or exploring the rugged South Coast, these steps will help you make confident decisions and travel safely.
- Map your route and season. Think about where and when you’ll be driving. If your trip includes the South Coast, highlands, or winter months, we strongly recommend adding Sand and Ash Protection (SAAP) or upgrading to the Zero-Excess Insurance Bundle (Liability Waiver). This ensures full protection from gravel, wind, and volcanic ash damage, which are common in these regions.
- Check road and weather updates daily. Conditions in Iceland change quickly. Before setting off each day, visit trusted sites like road.is and en.vedur.is for updates on road closures, ice warnings, and strong wind alerts. This small habit reduces risk and helps you plan smarter routes.
- Complete online check-in for fast pickup and fewer hassles. Save time at the counter and start your trip smoothly by completing your online check-in before arrival. This also helps verify your insurance preferences and ensures your car is ready with the coverage you selected.
Following these steps gives you both confidence and clarity. You’ll understand what you’re protected against, know what to expect from Iceland’s conditions, and avoid unwanted costs. It’s the Blue Car Rental way—transparent coverage, simple choices, and stress-free travel for every kind of journey.
Final Word
Traveling around Iceland isn’t just about the destination—it’s about the experience of the open road, the changing skies, and the feeling of freedom. But that freedom comes with responsibility. Having the right car rental insurance in Iceland can make all the difference between a relaxed road trip and a stressful one.
Think of insurance not as a box to tick, but as your safety net against Iceland’s wild elements—volcanic ash, strong winds, gravel, ice, and unpredictable weather. Blue Car Rental has built its coverage plans specifically for these conditions, so you can focus on the adventure instead of worrying about damage costs or deductibles.
Choosing the Zero-Excess Insurance Bundle means complete peace of mind: no deductible, no stress, and automatic protection against the most common road risks. If you prefer a lighter option, adding Sand and Ash Protection (SAAP) still gives you a strong layer of defense, especially for routes along the South Coast and Ring Road.
At the end of the day, every traveler wants the same thing—to explore safely and enjoy Iceland’s beauty without setbacks. Blue Car Rental’s flexible options let you do exactly that. Whether you’re chasing waterfalls, crossing mountain passes, or cruising toward a glacier lagoon, you’ll know you’re covered for what truly matters: a carefree Icelandic adventure.
SEAMLESS CAR RENTAL IN ICELAND: EASY PICK UP, DRIVE, AND DROP OFF
