Car rental in Iceland: Why I always recommend paying for extra insurance

As you may have noticed, if you follow me on Facebook, Twitter or Instagram (which you should do – just saying), I spent the last two weeks in the US and Canada, traveling around the West Coast with the boyfriend. We flew into Vancouver, went from there to Portland, flew to San Francisco, drove down Highway 1 to San Diego and then stopped over in Seattle on the way back to Vancouver. It was kind of awesome.

The two of us at the International Rose Test Gardens in Portland

The two of us at the International Rose Test Gardens in Portland

When I talk about car rental here in Iceland I always mention to people that they should look into getting an extra insurance for their rental vehicle because the roads in Iceland can be a bit dangerous for those who are not used to driving on single lane, gravel or icy roads So when the man at the Alamo service desk at San Francisco airport asked me whether I wanted extra coverage for an additional fee I initially thought I probably wouldn’t need it since we wouldn’t be dealing with the same difficult conditions as here in Iceland. I did decide though, in the end, that I should probably practice what I preach so I somewhat absentmindedly agreed the extra coverage.

This turned out to be a really good idea.

After we picked up our car in San Francisco we drove down to San Jose to meet guests, Jill and Mike, that joined my tour this summer that had invited us to brunch in their home. It was a lovely brunch and after eating their delicious food and getting lots of tips on what to do next on our journey we continued on to Monterey where we were going to spend the night.

A furry friend I made on the way

A furry friend I made on the way

We had also rented a GPS with our car and in Monterey we started having some problems with it because what it was telling us and what we were seeing didn’t add up. We later found out that we were simply misunderstanding the direction the device was giving us but at the time we were royally confused. We took a the wrong turn and the boyfriend had to think quickly to get us back on the main road.

We never saw the truck that hit us coming. All we heard was a thump and then our own heartbeats as our blood pressure went through the roof. The car swayed from the impact and we snapped out of the initial shock. “Holy fuck (excuse my language but the language we used at the time was much worse) we wrecked the car!”

rental car

Our car post crash

We were lucky that we were not on the freeway and the traffic was not driving faster and that no one got hurt. We were also lucky that the guy that hit us was totally chilled and was extremely nice and helpful. And we were super lucky that I had decided to set a good example by buying that extra insurance.

I should also mention that the fact we had a local SIM card with a data plan (AT&T if anyone is traveling to the US soon and needs a recommendation) was an immensely helpful because we could immediately call the Alamo road service for advice and direction and look up the closest service station where we could switch cars. The SIM card saved our lives on multiple occasions but I think I’m going to dedicate a future post later to fully explore that topic.

To make a long story short we didn’t have to pay anything because the insurance covered the accident and the next day we were in a new car and on our way to our next destination. We could have gotten a new car instantly but we decided we didn’t want to drive any more that day and checked into our hotel instead. Which brings me to another subject which is to rent a car with a good reputed car rental agency that has lots of service stations around the country so your problem can be addressed in a swift and timely manner.

Beautiful jellyfish at the Monterey Bay Aquarium

Beautiful jellyfish at the Monterey Bay Aquarium

The moral of the story is that you never know what is going to happen. We have a saying here in Iceland that sums this up quite nicely: accidents don’t announce their arrival. Especially not in places like Iceland where the road system is somewhat underdeveloped and unfamiliar circumstances lurk around each corner.

As you may know I offer affordable car rental through this blog (the prices for this winter are really good, you should check them out) and the reason I chose Budget as my partner was because, apart from their competitive prices, I knew their service was good and that if something would happen to you they would be able to help you. Clear and simple.

San Francisco

San Francisco

When you book a car through my blog you will get an option in the booking process to buy extra coverage. If you don’t pay for it when you book the car you can also request it and pay for it when you pick it up. Although it doesn’t get you out of paying for the damage completely like the coverage we had in California (I don’t know if this differs between states or rental companies in the US) it lowers your self-liability (non-waivable excess) considerably if you have it. For a normal car you never pay more than 25.000 ISK (as long as you didn’t show reckless driving or broke the agreement in some way) and for jeeps and bigger cars the amount is 55.000 ISK (as of when this post is written in October 2015).

This may vary between companies so make sure you ask about these things at the time of rental.

You don’t have to be a genius in math to see that if you total a car in an accident it’s way better to pay a bit more for this than pay the full damage. Especially when you look up the ridiculous amounts people sometimes have to pay for seemingly minor incidents. If it’s a long rental it may add to the cost a bit, which is especially frustrating if you don’t get into an accident, but that’s how insurances work. They’re always expensive if nothing ever happens to you.

Totem Poles in Stanley Park, Vancouver

Totem Poles in Stanley Park, Vancouver

Paying for the extra coverage for short rentals should be a no-brainer and although I understand why the extra cost makes you hesitant about paying it for longer rentals the risk also goes up the longer the rental is. There are more opportunities to get into an accident in ten days than just one.

I’m pretty sure that our holiday would have been ruined if we would have had a pending payment hoovering over our heads the rest of the trip.Even though I was told by three different people from Alamo that we were almost certainly covered by the extra insurance it still took me some time to shake this off and leave it behind. It wasn’t until I talked to the insurance company and was told on tape that there was almost no way we would be charged for this that I calmed down and relaxed again.

I should also mention that I have a credit card with some of the best travel insurances available in Iceland but this would not have been covered by that insurance like I actually thought it would be. So make sure you check that out too before you leave home and think you are covered.

Buying that extra insurance was the best idea of my life I think and I will never rent a car without it again. For realz.

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17 thoughts on “Car rental in Iceland: Why I always recommend paying for extra insurance”

  1. Michele says:

    This is a timely post for us as we recently booked a car for our upcoming trip to Iceland in two weeks! We’ll only be there for four full days but we did the math and it just made sense (there are four of us, one child), especially as we wanted to get out of Reykjavik for two of those days. I just asked the husband and he said that it’s on his list to check into (we always book our travel with our Platinum AMEX which has extra coverage). What works well here in the States doesn’t necessarily translate abroad.

    Also you were in our current (and former) neck(s) of the woods! Were you just giddy with the price of gas in the US? Granted, California gas is one of the most expensive because of all of the hidden taxes that get thrown in by the state and local governments. But up here in Washington State we’re looking at closer to $2 a gallon for the cheapest grade.

  2. Glad you are home safe!

  3. Aurore says:

    Hello! this article comes also perfectly on time for us as we are planning our trip to Iceland for end of November and i’m looking at the car rental offerings. I can see that most of them, including Budget, propose 2 types of insurances:
    Super Collision Damage Waiver Theft Protection Sand & Ash Damage Waiver
    Super Collision Damage Waiver Theft Protection

    Would you recommend the Sand & Ash even during winter? Do you have any recommendation?
    Thank you !!

  4. Danielle says:

    never hired a car in US, but from going with my family i remember there was always lots of insurance to add on!

    when i hired in Iceland last month, i got all the insurance i possibly could. I was travelling alone, and could just about manage it for the few days i had. i dont think i could afford to hire a car solo for a week etc 🙁

    I also looked at some website offering insurance as a yearly thing to cover car hire – that, if you travel often, maybe be cheaper than getting the extra insurance every time you travel. can’t remember any of the names of the site, but im sure google will find it if you search.

    but anyway, i got all the insurance because i just couldnt feel comfortable with the possible damage that could happen. As it happens I had my own scare story, but luckily turned out ok. When driving on a road outside of Reykjavik (returning from a site i had been too, so had previously been on the road 1 hour before), i ended up driving on fresh, wet tarmac – there were NO signs to indicate this was there, the road wasnt closed off, no flashing arrows telling me to move over, by the time i realised, it was too late. when i stopped on the side of the road (safely obviously) and got out and looked at the car, i felt so sick! Dripping wet tarmac off the wheels, wheel arches, underneath the doors and i assume the underneath of the car. I knew the wheels/tyres/underneath of the car were not covered by ANY insurance so i thout f*ck this is going to be one expensive holiday……. I didnt know what to do. I phoned the rental roadside assistance who suggested i go to N1 and get a spray to spray on the tyres, which sounded like magic spray! This didnt work as magic as i thought it would, but after in total, about 2 hours cleaning it (at the time and then at the end of the day), and i dont even spend that long cleaning my own car! i think i got it to the stage where it wasnt particualry noticable. But i was still terrified that i would get charged for cleaning it – when people in the Uk get tarmac on the car, its a huge deal and people go mental about it (as far as i remember) – i spoke to the guys I had done a photo tour with who said they didnt think it would be a problem as tarmac on cars was really common thats why you have the spray (just not driving in it i assume!) – and they said if i had any problem with the rental firm they’d speak to them for me……… As it turns out, when i returned the car it was signed off as ok, so i guess i ‘got away’ with it – but the sinking nausea in my stomach when i looked at this car covered in dripping wet tar mac… holy shit! There were no signs, i was innocent!!

  5. Fredy says:

    I am completely agreed with you… You must take the assurance package. I went to Iceland last summer and I did not take the GP (gravel protection) assurance… I did not crash or drive the car in gravel roads.. However, the rental car company has found a very insignificant scratch (you almost need to see it with hand lens) which I was forced to pay… and costs me more expensive than the rental car for ten days… With my experience, if you do not take the GP assurance, these companies will take the time for checking your return car carefully, finding something to charge you extra money… Then, do not save money with assurances, take them!!! and finally… do not try Go Iceland rental cars. They have the worst and useless front desk service… In the other hand, I will strongly recommend Lagoon Rentals… It is an excellent company..

  6. mm Auður says:

    I’ve personally rented on multiple occasions with Budget, also before I became their partner, and I’ve never had any problems with them and I’ve never been charged anything extra.

    What I would recommend people do when they pick up the car is to take a photo of every side of the car and make sure there aren’t any unreported scratches or dents there. When you return the car I would do the same and demand that someone will come out with you to go over the car with you.

  7. Elizabeth says:

    Great, useful post. I’m glad you guys are okay.

  8. Juliana says:

    Hello Auður, do you have a recommendation for car repair shop in Reykjavik?

    1. mm Auður says:

      Actually I don’t. We just take our car to where we bought it and I’ve always asked the men in my life to take care of stuff like that (the boyfriend, my dad, friends etc.). I know, not very feminist of me but I just don’t understand cars (apart from driving them, that is) 🙂

      I should point out that the men in my life come to me for advice on software, the internet and social media if that helps 🙂

  9. Danielle says:

    I have just been looking at Viking Cars and, just shopping around to see whats out there in terms of cars and blah blah. Viking and carrenters provide basic insurance with the price but not the full protection you can get via budget, geysir etc so you’re covered for everything you can get cover for. i like the idea of being able to get a bigger car than a yaris/i10 but wonder if its indulgent to do so really. i’d only really want a 4×4 if i were to drive out to the plane wreck (i plan on walking right now) but i think i might get too nervous to drive it even in a 4×4! viking cars etc does seem a good deal, but im not sure i can leave the comfort zone of extra insurance 🙂

    1. mm Auður says:

      I have to be real honest with you and say that I’m a bit skeptical about sites like Viking Cars and Car renters – not because I’ve heard anything bad but just because it’s really important to me personally to trust that the car and the tires are in good conditions, that the insurances are bullet proof and that the road assistance really works. I should make it really clear that I have no evidence that all of this doesn’t apply to the cars rented out through these sites but I just don’t trust it completely. Our car, for example, passed inspection just this morning but we still know that there are two things we have to fix soon before it causes a problem (it isn’t causing a problem now, and isn’t likely to do so in the immediate future, which is why the car passed). We know about these kinks and how to work around them because we drive the car every day but for someone that is not used to it it might become a bigger problem. If we were greedy or untrustworthy we might rent out the car with said kinks and then not tell anyone about it. Just for example. Again, not saying that’s the case, it’s just something I would personally worry about.

      Of course it’s a personal choice and for some it makes sense to take a small chance for a lower price and maybe their schedule is not so full that they can afford waiting a while whatever situation that comes up is fixed. It’s just not the route I would go if I had a schedule so tight that I’d have to weight the pros and cons of making a bathroom break like so many people plan their trips 🙂

      BTW, I drove to the plane wreck in our family car the other day. It’s not 4×4 and it managed fine (there were a couple of places where I would have felt more confident having a 4×4 but I was just extra careful). But it was very cold that day and everything was frozen so the sand was not as soft as it can be when it has just rained for example.

      1. Danielle says:

        I would be inclined to agree with you. Its a nice idea but i think it would worry me far too much that it wasnt the ‘regular’ car hire process, and i would be on a tight schedule too. My car certainly has some kinks which I deal with but might be scary for someone (not that i’d rent it out, it’s far too old!) I think the idea works for some people but although i too havnt read enough yet to know ‘good’ or ‘bad’ my natural inclination is ‘hmmmm’ 🙂

        I think ill be debating the plane wreck thing in my head until the minute i go. i feel that any mishap here would probably not be covered by any insurance and although many people have said a normal car can manage it, I havnt a clue about driving on this terrain – i’m totally up for the walk (would be less stressful) but do worry about getting lost by myself and also if i wanted to go for sunset or auroa, a return walk in the pitch black and my poor navigation skills does not fill me with confidence! haha. on top of my indecision – there’s also the variable of the weather in general, so i think i just need plans A- C and see what life brings me 🙂

      2. Danielle says:

        Auður another question if I may which I keep meaning to ask but always forget.

        On our ring road trip in 2007, at a gas station (somewhere north I forget where, possibly near Húsavík) a small one that was just a pump and not much else – we put in a set amount to fill up with, not knowing how much we needed to put in it and thought it would have automatic shut off, but instead it carried on going and over flowed. I don’t know if this was the car or the petrol pump. When I visited last year, when I filled up the car it was the same set amount /price type machine and instead of risking it again (had already had a mishap) I went in and spoke to the attendant who changed it or changed something or other so I could just put in as much as I needed to fill up the tank to return the car….

        SO What í mean is – are all pumps these set price/amount? Or is it just Co incidence that th pump was the same (it was N1)? Does everyone just know how much they need to fill up the car? Just wondered, for future visits to avoid the same mishap

  10. Yang says:

    Hi, I just try to get a fee quote from BUDGET from your site, I do not see may insurances to add on like other agencies. Especially the ones for sand. Why is that?

    1. mm Auður says:

      You can book and pay for them when you pickup the car.

  11. Jade says:

    Does budget car hire automatically supply all winter hire cars with winter tyres?

    It’s not clear on the website and I wouldn’t want to pay extra!

    1. mm Auður says:

      Yes, all respectable car rental agencies rent you cars with good winter tires.

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