Driving on gravel roads

I am not referring to F-Roads, but rather roads that Rick Steves plans (which include the gravel roads)

This is a question that you really need to ask your car rental agency (preferably before you commit to an agency).

And it's not a question of it being "legal" to drive a rented car on unpaved roads. It's a question of whether your rental agency allows it (my guess would be that they probably do, but you should ask them).

I have not rented a car in Iceland (probably will next year) but as well-intentioned as folks here are, I would not rely on them for this. Folks here can relate what their previous experience was, and that may tell you how things go sometimes, but that may not be a reliable predictor of what your experience will be.

FWIW I have rented cars in other northern places (the Faroe Islands, Scotland, Ireland). I've never seen a prohibition against driving on unpaved roads in my auto rental contracts (and I do read them - you should too, to look for any such exclusions). I have seen other prohibitions (a common one is "no ferries"). Best to ask specifically about whether they allow driving on unpaved roads when you are shopping for your rental car (and then read the contract when you see it to confirm there are no surprises).

We have rented cars in Iceland many times and yes, the rental car companies say whether you can drive on certain roads or not. Just because a road is gravel does not make it off limits without an F road approved vehicle. That is because a lot of sights are on gravel after you get off the main road. However, if you go on any F roads, you MUST have permission from, the rental car company. On their websites you can see which vehicles are allowed. They have GPS trackers, so you don't want to try and fudge this. Even though some roads are not F roads, they can still be very rough and if you have a vehicle without much clearance, you are going to do damage to the underside which will not be covered by any insurance.

What are your destinations?

thanks for your replies!
We are not heading put any place "off the beaten path" (Golden Cirlce, south coast, Snaefellsness), but some destinations (Secret Lagoon, Hvammsvik hot springs via 520, and a few others). Any issue with these areas and the like?

One issue with gravel is finish and panel damage from cars in front of you. It’s not just about ground clearance. 4WD is not normally needed in the west in the summer, but ground clearance remains important, if only for potholed waterfall parking lots in the south, and dumb Waze instructions to cut a corner between two paved roads with an unpaved stub.

It’s not just permissions, it’s ten kinds of insurance.

The places you specifically listed will be fine with any vehicle, but there are areas in the Golden Circle and on Snaefellsness that you absolutely want a car with higher clearance. Gjain is one of those, and our Kia Sportage, while allowed for F roads I cannot imagine taking this thing on one of those! At Gjain, that was not an F road but it was very rough and we had to go very slow, about 10-15 mph on the good stretches. Also on Snaefellsness the road into Djupalonssandur Beach is very narrow, hilly, twisty, and a bit rocky. We had a 4x4 camper van when we went here, and again went very slow. Note that if you go here, the parking lot is very tiny, so you may very well arrive and not be able to stay if there is no parking. That was the case for us the first time.

You noted full insurance, which is what I highly recommend. That is one thing you do not want to skimp on in Iceland. Of course there are excluded things, so really read through. One of those things is the car doors. It is so windy there that car doors can be flung backwards, and that is one of the exclusions. So when you park, park into the wind, and then only one person get out of the car at a time, and hold on very tightly to the door until it is closed again.

Really great advice above on important details. Thank you (and bookmarked for future reference)!

Of course there are excluded things, so really read through.

Of commonly excluded items is damage to glass (maybe a problem if gravel is flying around) and Tire/wheel damage (an issue if you are on rutted rough roads).

Of course they sell a separate insurance for this, not part of "Full Coverage". To be fair though, on your car at home, wheel damage is not usually covered and glass requires additional coverage to Collision (Comprehensive)

Paul--Glass is covered under the gravel part of insurance which is included with the rental, not extra. If you opt for the full coverage, then your liability is zero. That is with Blue at least. Here is from their website.

"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 40.000 ISK (approx. $290)."

Lotus car rental offers the gravel protection on the two higher levels of insurance, but not the most basic one.