Choosing the right insurance for your car rental in Iceland is essential. Iceland is a beautiful country with dramatic landscapes but it has extreme weather conditions and gravel roads that can cause damage to your rental car. Insurances save your back in case of damage. Without them, you would have to pay for this damage out of your own pocket. In general, we highly recommend you get good coverage to reduce your self-risk.

You can find below the insurances included in your rentals with Lava Car Rental and the optional insurances you can add to your reservation.

Insurances included in Lava Car Rental

All car rental reservations made through Lava Car Rental's website come automatically equipped with the following insurance:

Super Collision Damage Waiver (SCDW)

The Super Collision Damage Waiver (SCDW) covers the damage to the rental car in case of collision. Self-risk is 150 000 ISK.

Damages not covered by SCDW:

  • Negligence
  • Driving while intoxicated
  • Damage to tyres, headlights, windscreen and undercarriage
  • Damage caused by nature wind
  • Damage caused by sand and ash storms
  • Damage caused by driving into water

Theft Protection (TP)

Theft Protection (TP) covers the vehicle for theft. No self-risk. 

Please note that the insurance does not cover items stolen within the vehicle.

Gravel Protection (GP)

Gravel Protection (GP) covers the vehicle against damage to the windscreen, headlights, mirrors, hood or any other part of the vehicle when gravel or rocks get thrown onto the car by another passing vehicle. Self-risk is 35 000 ISK.

Optional insurances 

Besides our standard insurance, we offer the option to upgrade to our Full Protection package to increase your coverage in case of damage and reduce your liability to zero.

Full Protection

The Full Protection is our most complete package and it includes all the previous insurance (SCDW, TP, GP) plus the extra insurance below. No self-risk for a worry-free trip.

  • Sand and Ash Protection (SAAP)

The Sand and Ash Protection (SAAP) covers the vehicle for damage to the paint, windows or plastic parts caused by volcanic ash and sandstorms. No self-risk.

  • Tyre Protection (TIP)

The Tyre Protection (TIP) covers the tyres and the wheels replacements. In the case of a flat tyre, the renter is responsible for transporting the vehicle to the nearest tyre shop. No self-risk.

Other useful information about insurance

What damages are not covered by any insurance?

The following damages are not covered by any car rental insurance in any case:

  • Negligence
  • Driving while intoxicated
  • Damage undercarriage
  • Damage caused by nature wind
  • Damage caused by driving into water

I have credit card insurance. Can I forfeit the CDW?

If you have insurance through your credit card and wish to decline our insurance, we will happily assist you. Just make sure you will be well covered by your credit card insurance. Please note that there is no refund of CDW Insurance in case you forfeit it.

Do I need to pay for the damage when I return the car?

In Iceland, in case of damage, you will first pay the car rental for the damage and then get reimbursed through your insurance provider. The amount to pay depends on the type of damage (if it is covered or not by the insurance), the car rental insurance plan of the customer and the self-risk amount.

Can I add additional insurance after I have made a reservation?

You can book your insurance during the booking process, upgrade your insurance in your Manage my booking area or by sending us an email, or add some insurance when you pick up the car at our office.

Is Roadside Assistance included in the rental? Do I need to pay anything for it?

In case you have any problems during your journey, we offer breakdown services by calling our phone number or contacting us at We provide Roadside Assistance and cover the cost if it is due to a fault in the rental vehicle. If it is not due to a fault in the rental vehicle, Lava Car Rental does not cover the cost for roadside assistance but we will assist you in getting the help you need during office hours.

Do you have any questions?

If you still have questions about our insurance or want to know more about car rental insurance in Iceland, we encourage you to read our complete guide or contact us at

If you are ready to rent a car in Iceland, you can check the available cars for your dates by searching on our website:

Rent your car in Iceland with Lava Car Rental