Our goal is to offer transparency throughout the booking process and during your rental period. Usually, the insurance terms are hard to understand, but we want to change that. Here we try to explain the insurances, so they are easy to understand. This way you know what is included and what is not, so nothing should come as a surprise to you.

If you have insurance through your credit card and you wish to decline our insurances. Please contact us by email at and we will happily assist you.

Included in the price:

When you book a car through our website there are four insurances that are included in the price Each insurance has a liability (excess). That means if you happen to have damage to the car when you return it you will be charged the liability (excess) amount.

Collision damage waiver and super collision damage waiver (CDW/SCDW) (included)

CDW and SCDW cover the bodywork of the car. In a collision, the bodywork is usually the first thing that gets damaged. The liability (excess) depends on the size of the car. For 2WD vehicles, the liability (excess) is 90.000 ISK (approx. $700) and for 4WD vehicles and vans, it is 120.000 ISK (approx. $950).

Example: You return a 2WD car with a dent on the passenger door. We inspect the car and see that the damage was not there when you picked up the car. Our employee will let you know about the new damage and charge you 90.000 ISK (approx. $700). The 90.000 ISK (approx. $700) is the absolute maximum you will be charged. If the third-party damage repair report will estimate that the repair will cost less than 90.000 ISK ($700) the difference will be refunded.

There are some damages not covered by the CDW and SCDW.

  • Damages caused by negligence

  • Damages caused by driving into waters and rivers and when driving off-road.

  • Driving while intoxicated

  • Damage to tires, headlights, and underside of the car.

  • Damage caused by the wind blowing up the door.

  • Damage caused by sand and ash storm. (only applies if the renter has not opted for the SAAP insurance).

Gravel Protection (GP) (included)

The gravel protection is important insurance while renting a car in Iceland. Gravel are common around the whole island. When driving on gravel roads the small stones will leave chipped paint at the front of the bumper. Chipped paint damages are nothing to worry about and you will not be charged for them.

The gravel protection also covers the windscreen, headlights, and mirrors. The liability (excess) for broken windscreen, headlights, and mirrors is 20.000 ISK (approx. $150).

Theft Protection (TP) (included)

Luckily Iceland is a very safe place and vehicle thefts are not very common. Though this is not common the car is always covered by insurance if it gets stolen. Theft protection has no liability (excess).

Keep in mind that TP does not cover items stolen within the vehicle.


There are two products that we offer for an additional cost. The sand and ash protection (SAAP) and the Liability Waiver (LW).


Sand and ash protection (SAAP)

The SAAP insurance was introduced because our standard insurance did not cover sand and ash damages. Sand damage is very common damage, especially when driving on the south coast. This can happen all year round.

Sand and ash damages are extremely costly and damage costs can range between 500.000 ISK (approx. $3.950) and 1.500.000 ISK (approx. $11.500). Without the SAAP the cost for the damage is completely on the renter's responsibility.

The SAAP reduces the liability down to 90.000 ISK (approx. $900)

The price per day is 1.650 ISK

Liability Waiver (LW) (SAAP included)

The Liability Waiver brings down all the liability on each insurance down to zero. As many of our customers wanted to have a carefree experience while driving around Iceland, we introduced the Liability Waiver. This allows our renters to drive carefree with Blue Car Rental while enjoying our beautiful island.

Keep in mind that this is not extra insurance but an option for our renters to waive their liability in case of any damages to the rental car during the rental time.

The SAAP is included with the Liability waiver and the liability is also zero.

Example: You return a 2WD car with a dent on the passenger door and sand damages. We inspect the car and see that the damage was not there when you picked up the car. Our employee will let you know about the new damage but because you opt for the liability waiver there will be nothing charged.

Liability Waiver reduces liability on each insurance down to zero.

The price per day is 3.590 ISK for 2WD and 4.690 ISK for 4WD and vans.