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.

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


  • Damages caused by negligence or driving while intoxicated.
  • Damages to the tires and service related to changing or repairing the tire.
    Note: Only applies if the renter has not opted for the Liability Waiver and/or Roadside Assistance Waiver.
  • Damages to the underside of the car.
  • Damages caused by driving into waters, rivers or off-roading.
  • Damages caused to the clutch or other mechanical damages resulting from the renter's negligence or misuse of the car.
  • Damages caused to the interior of the car.
  • Damage caused by sand and ash storm. (only applies if the renter has not opted for the SAAP or the LW insurance).


  • Charges or other costs for required assistance because of a breakdown or damage that is the driver´s responsibility.
  • Charges when pumping the wrong fuel on the car
  • Charges for losing accessories, such as the car key or a GPS unit.
  • Service charges and handling fees related to the renter's use of the car, such as fines for speeding, parking fee, and tunnel fee.
  • General charges for towing, resulting from the renter's misuse or mistakes such as getting stuck in snow, sand, water, or river.
    (Please see full details listed on the backside of the rental agreement.)

    Note: By purchasing Roadside Assistance Waiver any cost for the above-mentioned assistance is reduced to zero apart from service charges or handling fees related to speeding, parking violation or parking,- tunnel,- or other entrance fees.

Liability Waiver (SAAP and Tire Protection included)

All our customers can reduce their liability to zero by opting for our Liability Waiver. 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. 

  *Note - Tire Protection only covers the damage of the tire, i.e. the repair or cost of new tire. It does NOT cover the assistance required. By purchasing Roadside Assistance Waiver the cost for the assistance is waived.

Keep in mind that the Liability Waiver is not an extra insurance but an option for our renters to waive their liability in case of any damage covered by our insurances. This includes CDW/SCDW, GP, TP, SAAP and Tire Protection and is subjected to the terms and conditions of the Rental Agreement. Excluded are any damages not covered by insurances as stated in Article 29 and 32 in the Rental Agreement and terms and conditions. See here:

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.