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cars and insurance?

Hi all:

We are heading to Iceland in a couple weeks and we have a home exchange lined up and we were supposed to be using their car... well turns out my car insurance does not cover us for that in another country. So... I think we will probably rent, since I think it is unwise (and maybe illegal?) to drive their car without insurance - unless maybe theirs covers us.... I need to check that, just thought of it.

If I need to rent, I want to get a cheap one obviously, is it ok to get an economy or compact? We are planning the Golden Circle, Blue Lagoon, and south iceland all the way to ice lagoon.... I think all of those roads are paved?

And most cars don't seem to have A/C - I guess that is ok there?


Posted by
3318 posts

Personally I prefer a smaller car in Iceland. The roads can be quite narrow and it's nice to be able to maneuver around other vehicles and squeeze to the right when passing big trucks!
We rented from Fox and the price was quite reasonable and in line with some of the cheaper agencies at the airport.
When you rent the car see if your credit card covers you for damage and, if so, what exactly is covered. When you get to any rental agency in Iceland they will offer you all kinds of supplemental insurance - gravel, sand, wind, undercarriage, etc. These things are not just there to rip you really do need this coverage. I've never seen so many cracked windshields because of gravel being thrown up from other vehicles on the road. You'll constantly be pelted even on paved roads! Some credit cards will cover this though...if you take it through the rental agencies then, for some CC companies, it cancels out all of the coverage from your card. Make sure to be clear about this when making reserving and picking up your car. My Chase Sapphire Preferred card covers me for everything so I didn't take the supplemental insurance.
Yes...all of the roads you plan to drive are paved. The only exception will be the side roads leading to some of the waterfalls, the glacier lagoons, the black sand beaches, and almost all of the parking lots.
You will be absolutely fine with no AC! It never really gets hot enough there to really need it.

Posted by
286 posts

Also, most renters recommend taking extensive photos of the car before you drive off with it, because of all the potential damage that can be done (as described by Anita). You also might want to consider posting this on Trip Advisor - they have a ton of posts about cars and insurance, and there are quite a few residents of Iceland who post there. They may even know if you are able to drive the homeowner's car legally.

Posted by
926 posts

Thanks all! I will file that info away - but for now we are all set, since their insurance covers us (like ours covers them here). Crisis averted! :)