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Decoding the Wild West of Iceland car rental insurance

I often rent a car on trips, I have always used credit card insurance and never have bought additional "at counter" insurance, and it's worked out.

Often some insurance is included in the base rate. This is especially true when using local brands (and not Hertz, Avis, Thrifty, etc.). I have called the credit card company in advance (I will again) but they always say the same thing: that it's only additional insurance that you have to waive when renting to qualify for credit card insurance, any insurance included in the base rate is acceptable. This sets up the rather ideal situation where you have insurance from the company but the deductible will be picked up for free by the credit card company, and things not often covered by CDW like glass, tires, or vandalism will be covered 100% by credit card insurance.

Looking to Iceland, I have never seen so many insurance categories. Here is the insurance information of a Blue Car Rental (a leading local brand).

Super CDW is included in the base rate, but is not that Super since it still has a deductible of 90,000 ISK (about $735). Does not include glass, headlights (?), wind damage to car doors (?), sand or ash damage (?), or the underside of the car. All of these will be covered 100% by the credit card insurance.

Gravel Protection: Included at 100% coverage except glass has a 15,000 ISK deductible (about $120). Nice to know that dings
caused by flying gravel are covered by the car insurance at 100%.

Theft covered at 100%

Sand and Ash Protection: An oddball, apparently related to rare sandstorms that occur on 2 parts of the Ring Road and can damage the paint job. There is no included coverage. For 8 days the coverage would be 12,000 ISK (about $100 to buy about a $735 deductible). Credit card insurance covers this at 100%. According to a TripAdvisor post, driving in sandstorms is to be avoided and can be avoided by checking weather forecasts for those stretches of the Ring Road where wind blown sand is a problem.

ADDING COVERAGE FOR ZERO DEDUCTIBLE:
30,320 ISK or about $250 (also about a 35% increase over basic insurance)

Mostly posting this to think it out clearly, still plan on using credit card insurance. Hertz is a little cheaper but the rental site in Reykjavik is a few miles out of center and includes no insurance.

Posted by
104 posts

It is always such an (intentionally) tricky topic to navigate.

My one addition to your thought would be to suggest that you check with your card that its insurance would cover you in Iceland. Many cards have a handful of excluded countries—the peace of mind is worth the call.

Posted by
6699 posts

I'm not surprised - the insurance product is matched to the conditions on the ground and potential hazards. You should see what unaccustomed people try to do with their vehicles on rugged terrain (if they go off the well-paved roads). The ash is likely due to the volcanic nature of the island. I would also expect that it won't be like the US, where the rental car people wave you through and don't really inspect any car that's brought back. Icelanders are serious people, so take good care of the car. I learned my lesson driving in rugged terrain in northwest Argentina (it was too rugged for the Peugeot) - had to pay for tons of damages from the elements, dirt, dings, etc.

Posted by
3159 posts

Scudder: I have shilled this before here (no personal financial interest) but the Chase Visa insurance that goes along with the Sapphire and United Airlines cards (both with annual fee) has great coverage: all countries, all damage, and any reasonable car style up to 30 day rental length.

Agnes: Yes, I have experienced what would be considered minor wear and tear in the US being pushed as damage (in Mexico). Fortunately my wife took cell phone pictures at delivery which were zoomable onsite and showed the damage as pre-existing. I have also had minor damage we caused not called out in NZ, Norway, France, as it would not be called out in the US. I have noticed that some foreign cars are made of essentially tin foil: the body metal deflects with the simple push of a thumb, in this case Toyotas in NZ and Norway.

Posted by
6699 posts

I have noticed that some foreign cars are made of essentially tin
foil: the body metal deflects with the simple push of a thumb, in this
case Toyotas in NZ and Norway.

Yes, I had a door almost blow off and become inoperable/ dented when in a high-wind area in Argentina. When the Avis representative tried to open it, it wouldn't open. There was nothing I could do about it. The undercarriage was pockmarked with rocks and debris as were the sides of the car (yes, I did drive on a bunch of unpaved roads - that's how it is over there). And there was dust and sand everywhere even though we tried to clean it off. I wish I never rented that passenger car, it was like a mangled toy.

Posted by
6699 posts

No, I can't remember why exactly (this was in 2008) but I think it had to do with not being able to provide the correct documentation (whatever I got was in Spanish and I remember having a heck of a time trying to get a receipt for the cost of fixing the damage back and forth via email). We also had to hurry up and get to the Salta Airport afterward after dropping the car, so probably had less time than desired to straighten out some loose ends. I also didn't deny that the damage was caused by us (or to try to fight anything) because that was clearly the case - it was accidental but there were damages. My Spanish was not nearly good enough to communicate with the Avis lady onsite at the time. That was the one time I regret not getting supplementary insurance but I recall the car rental was very pricy to begin with (although gas was dirt cheap).

Posted by
21 posts

The car rental company will DEFINITELY check the car carefully when you return it. They even run it up on ramps and look underneath to be sure you didn't damage the undercarriage. In 2012 we scraped up onto a curb in a parking lot--very slow and only a little (under the car where you absolutely couldn't see it). It cost $600 to repair (luckily our credit card insurance covered it).

Posted by
3318 posts

This is exactly why I have a Chase Sapphire. Last time I was in Iceland (I'm going again in a little over two weeks) I rented a car. They pitch you a HARD SELL at the counter and try to scare the living daylights out of you with stories of sandblasting of paint due to wind, car doors being ripped off by wind, gravel cracking windshields, ash from volcanos, etc. They insist that no insurance you could possibly have will cover these things. When I pulled out my Chase Sapphire and presented it, after declining all insurance, the guy's face fell and he said, "Ah. Nobody with this card ever takes our insurance."

Posted by
860 posts

I don't have any new information to add to this thread, but I might feel better expressing my frustration about this.

I have a platinum Sky Miles AMEX card that offers rental car insurance. I have read the policy 5 times. I have confirmed that the policy is valid for Iceland. It is frustrating because they won't really discuss what if's with you. There is no exclusion for windscreen or undercarriage damage, but they won't tell you that it is definitely covered. "If you have damage to the car, submit a claim and see what happens", is the response I get. The policy also states that driving on unpaved roads which are not maintained by the state isn't covered. I know that the unpaved roads I will definitely be driving on in Iceland are maintained, but I wonder if it will be a hassle to prove this. It would cost me another $480 to completely insure the car against damages through the rental agency. The other complication is that I am receiving the car through a tour company as part of a package (so I am not paying the rental car company directly) which makes me nervous because of the policy language. I paid for the tour with the AMEX card. I also am having trouble finding out if the low level CDW insurance is part of the base rate or not, or if I can get that off of the car since it was booked by my tour company.

To add to this, I also was looking at coverage through Travel Guard and they gave me the same run-a-round.
It is a travesty that these unclear contracts from insurance companies are allowed to stand. The consumer has no way to truly protect themselves without it costing an arm and a leg.

My sister is an attorney and I will ask her advice on this, but I don't know what she can add.

Posted by
759 posts

EDITED: They will NEVER discuss "what ifs" and they would be as stupid as the night is long to do so (and get fired for doing so). Some phone operator is NOT an insurance company attorney with expert knowledge as to that very specific policy. The law is real clear-- you are purchasing the insurance and it will cover what is stated in the Policy contract. There are simply "no what its". You drive on an unpaved road that is not maintain by the State and it causes damage- you pay. The Burden of Duty to prove that it was government maintained is on You. MOST states have Insurance Commissioners/Department of Insurance that regulates coverage in that State. The Policy as such is the Policy. some type of answer to a "what if" question could be considered an impermissible modification of a Policy. The the rule, legally, is real clear-the policy covers what the policy states it will cover. NO Clerk can help you with that and actually doing o could be considered giving legal advice in many states that that would create a whole other realm of issues.

Iceland presents 'interesting" road conditions. Thus the various types of insurance. BE VERY CAREFUL. Not all credit card insurance is alike and its' coverage can vary wildly.

Others have posted about Wear and Tear damage ...On a 7 day rental how much wear do you get? How much damage did your car at home sustain in the last week? Normal wear and tear is a concept for an apartment rental not a short-term car rental. Wind/sand damage? That would be interesting. As is the dirt road (unimproved roads) issue- I would suspect many credit card policies will have an exclusion for that (government maintained or not-again each policy is different). What does your credit card insurance specifically state, if anything, on that subject? Be careful.

Posted by
860 posts

Onefastbob, thank you so much for your support. Unfortunately, your comments did not aide my situation. I am careful and I know how to read English, and it is still frustrating for a consumer. It is also either very costly or chancy. I pay less than $500 per year for my personal car insurance with a reasonable deductible. This is highway robbery.

I never mentioned anything regarding wear on tear on my 15 day car rental, so not sure what you are referring to. I guess my "what if" statement wasn't lawyerly clear. But there isn't a mention of windscreen coverage or coverage from natural elements. I am just saying that it would be easy for the insurance company to just say, sorry that isn't covered and nearly impossible for a consumer to fight that without paying extensive attorney fees.

Posted by
4 posts

I need some help. My Chase CC will cover all damage to the rental up to the cost of the car. No problem there. BUT, if I decline the insurance coverage, how do I get covered for personal liability if I have an accident that damages someone's car or if they get injured?

Posted by
4 posts

Ok. I checked on that, but PAI is for me and my passengers.
What I am looking for is what insurance I need to get to cover in this type of situation.
I have an accident and it is my fault. My CC covers my rental car. What insurance do I have to get that will cover the other car and their passengers?

Posted by
759 posts

From a basic Google Search- Top HIt. Trust it as you would with any Google search (don't). The actual site discusses all the various insurance issues in Iceland, including sand, F roads etc.

"What is Third-Party Liability?

Third-Party Liability or TPL is, in essence, protection from the claims of someone else (a third party). It covers any damage that you might cause to another person, vehicle or property while cruising around in your rental car. It also covers the passengers in your car in case they suffer damage or injuries.

In Iceland, Third Party Liability Insurance is a legal requirement and is normally included for free. If a car rental attempts to offer it as optional insurance for an added cost to you, then consider that a warning sign."

Posted by
3159 posts

Noting that ADDITIONAL liability is often offered at at extra charge. I have never purchased it. As a practical matter the owner of the car always retains some liability exposure even when you are driving, so another reason it is always included.

Vandrabrud: I’m no expert but I wouldn’t count on credit card insurance in your instance. You are not directly renting a car with your card. Are you getting the $20 Amex policy? That would work.

Wear and tear: I once put 2000 miles on a rental car in 4 days; one would expect wear and tear in 2000 miles.

Posted by
759 posts

"Wear and tear: I once put 2000 miles on a rental car in 4 days; one would expect wear and tear in 2000 miles."
Yes- tire wear.... use of engine oil, etc.... you got me on that one Tom…but not stained carpet/seats/door dings/paint chips…

Posted by
3159 posts

but not stained carpet/seats/door dings/paint chips…

Yes, any one of those things can happen in 2000 miles and would be expected “wear and tear.”

Posted by
4 posts

You have all been so helpful.
As I hopefully now understand it, I waive the CDW, GP, TP, SCDW. Then I keep TPI.
Would that be correct?

Posted by
860 posts

Tom,

Rental Vehicles rented through a rental agreement which are provided either as part of a travel or similar package/services .....would qualify for benefits.