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Understanding The Car Rental Process In Iceland

Before traveling to Iceland I felt like I had a pretty handle and understanding on how to rent a car. I mean in “real life” it’s not that difficult right?  Reserve, show up, pay, roll.  Well pump your brakes it’s not quite as cut and dry in the land of Fire and Ice.  While the process is similar in some ways.. .I implore you to read the fine print.  Do the research not all rental companies are alike.

After what felt like months of  “research” I think I was equal parts confused as I had answers.  The more I researched the more questions I had.   They say too much information will kill you and I almost have to agree.  Based on my experience I’m going to try to dispel some of those myths.

Should I wait until arrival to rent or book in Advance?

It’s always good practice to book in advance to guarantee the type of car and size you want will be available.  I’ve gone to the counter in areas where cars flew off the shelf and was almost disappointed.  In fact this very thing almost happened to me in Lapland.  I reserved a car online but due to my flight being canceled I had to change the pickup date.  I went online and made what I thought to be the update only to get to the rental counter the next day and was told my booking was canceled due to a NO SHOW.  The clerk then said “well you’re in luck we have only 1 car left in the garage and its the same model you were going to rent”.   I’m thinking no kidding… its the car I was to get the day prior!!!!  The clincher was that now I had to do a completely new booking and the price literally doubled AND WORSE it was 1 less day for the rental.  ( thankfully I have Travel Insurance)… that’s another topic for another day.  My feelings hurt, disappointed and pushed into a corner I agreed to the hiked up price as no other rental company had cars.  What am I saying?   These are some of the risks that can happen when you chance things at the counter versus booking in advance.  It’s important to note as well that prices are cheaper when booking in advance.

Insurance Anyone?

A cautionary tale.  Years ago I rented a brand new vehicle for a 10 hour road trip.  Usually I’m a cheapo by my own admission but for some reason on that day something said to agree to the $20/day rental insurance which guaranteed if anything went wrong with the car I could hand in the keys and walk away.  Granted this $20 a day would increase my steal of a deal rental by $100 which was a lot of money at the time but I went with it anyway.  Fast forward 5 days later while driving down the Interstate on my way home low and behold a deer ran out on the Interstate and I hit it throwing the deer about 50 feet ahead of the car.  I closed my eyes so I’m not really sure how it all happened but what I do know is I was left with 1 dangling front light that would only come on when I turned on the High Beams, the car literally looked like a deer ran into it.   In that moment I was soooo thankful for having listened to my spirit and taken out that insurance.  The next day I boldly went to turn in the car and I remember the clerk saying “looks like someone had a date with a deer”!  I said YUP and here’s your keys and just like that I was off the hook for any fees or liability.

Getting back to Iceland… there are sooo many levels of insurance to where your head will spin with each level overlaying the previous.  There’s Gold, Silver, Platinum and with each level so does the price.  At the end of the day my $235 rental that included CDW blah blah blah quickly grew to over $500.  Money that was NOT budgeted for prior might I add.  Thank God I had room on my credit card. While on that note I’d say ALWAYS travel with a credit card that has a healthy limit for incidentals such as this.  Why the hike?  Well after listening to the pitch, anxious to get my trip started and equally aggravated with a borderline headache I opted to take the maximum insurance.


Breaking Down Insurance

What is TPL? ( Liability Insurance)

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

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.  TPL and CDW are typically “INCLUDED” or “FREE” with the rental.  The good bad and ugly to that is this.  Most American Credit Card companies AMEX in particular covers all my rentals when I use my amex BUT I have to DECLINE CDW if offered.  In Iceland this coverage is FREE/INCLUDED so there’s no way to decline hence making it virtually impossible to utilize this bonus feature of your card.  That hurt and sucked.  This is also what contributed to my going for the Maximum coverage plan.

What is a Collision Damage Waiver?

CDW insurance covers most of the damages that might occur with minimum cash outlay on your behalf  or minimal liability.  The insurance covers most of the damage leaving you with a set self-risk amount that you are liable for.  Depending on the level of Insurance you take out the amount of liability you are responsible for will vary. With the PLATINUM plan my liability or responsible amount was $250.  I could handle that but the cheaper the plan you select the higher the amount you are required to pay and that could be as high as $2000 and when I say they are going to get their money… BELIEVE ME!…. and then there’s…..

Super Collision Damage Waiver ( huh)?

SCDW as its called is an advancement of the ‘Collision Damage Waiver’ and significantly lowers the “self-risk” amount (the sum you could pay up to if the vehicle is damaged).

Iceland has a high risk of sustaining damages to vehicles due to road conditions and weather conditions. So, it is always best to anticipate the worst-case scenario if you can. This will help to prevent  higher unexpected expenses if any damage was to occur.  If I learned nothing more from my rental experience it was that there are so many things that can go wrong due to the constantly changing weather its not worth the risk of trying to be cheap.  Do yourself a favor and just pay up.

Gravel Protection

I told you there were soooo many levels of Insurance it’s tricky, confusing and slightly stressful to grasp.  This one sounded easy enough but just when you thought you understood it… you don’t.  Typically gravel protection is for taking vehicles on what’s known as F-Roads which are typically closed during the winter so you’d think decline but you’d be thinking wrong.  As it was told to me gravel protection also encompasses rocks cracking windshields etc. caused by loose gravel on the roads.

Sand and Ash Protection

Sounds self explanatory right?  Wrong!  A newcomer to the country has no idea what this means or how it will apply to your plans.   I’m told it is only really required from April to June pre-winter months and recommended if you’re headed south like towards Vik etc.

Thoroughly confused yet?

Don’t worry you are not alone.   Let me throw this last nugget at you.  Just when you think you’ve heard or read it all…  then this happens.  Wind Damage… lets talk about that. Wind in Iceland is unpredictable and also quite gusty.  

You can see by how my raincoat is blowing the wind gusts are pretty strong and no joke.

Actually gusty doesn’t begin to describe it. While I was there a wind storm occurred which caused roads to be closed and more specifically the airport shutdown completely causing ALL flights to be grounded and canceled.  The other thing you’ll be interested to know is that NONE of the above insurance plans cover wind damage to car doors.  What does that mean?  Should the wind blow the door backwards you WILL be held responsible for the cost of the repairs.  I read a story of a young California guy who was in town while I was there and he not only didn’t have insurance but had a brush with the same wind storm that caused the airport to be shutdown.  He learned very quickly and intimately what the impact of that was to the tune of $2000 he had to pay upfront and out of pocket. OUCH!

PRO TIP: We quickly learned to do park in the direction of the wind so therefore the wind is pushing towards the front of the door making it difficult for the passenger to get out vs the opposite way where the wind would blow the inside of the door hence causing the door to blow back.

I hope this helps to demystify the car rental process in Iceland.  What’s been your experience?  Did you get insurance or didn’t and wish you had?  Share your feedback below.  Don’t forget to follow us on IG@randmlyrasheeda

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