DrivingDriving tipsDealing with a Rental Car Accident: Steps to Follow
Road traffic accident. Two passenger cars collided on the road. Minor damage without injured people
Go Car Rental Iceland travel writer Leah BIlquist
By Leah BIlquistNov 29, 2023 • 10 min read

Dealing with a Rental Car Accident: Steps to Follow

A traveler’s nightmare is crashing their rental car during a road trip. Honestly, we can understand why. But, accidents do happen and some things are out of our control. So what happens if you crash a rental car?

The aftermath of a rental car accident is going to depend on if you have insurance or not, and what type of insurance you have. Before we go any further we want to make one thing clear. Always, and we mean always, have rental car insurance.

What happens if you crash a rental car with insurance?

There are a lot of different circumstances when it comes to rental car coverage and accidents. When an accident happens, you need to file a claim with the auto insurance company.

Here are a few insurance coverage options that will save you money during an accident with your rental car.

Excess Liability Insurance

Excess Liability insurance covers claims that exceed the limits of a primary insurance policy. It covers any damage that you might cause to another person, vehicle, or property. It also covers the passengers in your car in case they suffer damage or personal injuries.

Excess Liability is included in each plan, but with different circumstances. For Plus+ it would be 875€, Premium is 0€ and Premium Plus+ is 0€.

CDW - The Collision Damage Waiver

The Collision Damage Waiver is going to be a lifesaver if you get into a rental car accident in Iceland. This will cover collision damages that occur to the body of the vehicle and injuries to the driver and passengers. It covers a majority of emergencies as well as hospital stays and even medical checkups.

Many Iceland rental car companies charge extra for this. But, at Go Car Rental CDW is included in all of our rental car insurance plans!

Car damaged on the side door

Gravel Protection

Accidents and damage to rental cars in Iceland can happen from driving on gravel roads. This is why Gravel Protection is an important insurance add-on.

Simply put, this insurance covers damages from gravel to your rental car. This can include the body of the car, the headlights, and even the front windshield.

Broken car windshield glass from stone

The roads in Iceland have a layer of asphalt that is rougher than normal roads. The country does this to provide a steadier grip on the roads when winter hits. The loose gravel rock can help prevent the roads from turning into a sheet of ice.

This is why paved roads tend to be more slippery and prone to car accidents when covered in snow and ice.

If you choose to rent with us, we include Gravel Protection in your rental car price!

Additional non-mandatory, comprehensive gravel protection insurance will cover damages from gravel roads to the windshield and headlights. Without this insurance, you could end up paying around 1.500 EUR as windshields don't come for cheap here in Iceland.

We would rather you spend that money on epic hotel stays and delicious dinners instead.

SAAP: Sand & Ash Protection

There are plenty of car accidents due to sand and ash in Iceland. And SAAP or Sand and Ash Protection cover just that. Sand or ash can cause a major mess to a vehicle, sometimes requiring a whole new paint job. As you can imagine that would cost a lot to fix.

Adding SAAP to your rental can provide you with peace of mind during crazy weather events. This insurance is recommended any time of the year. But especially when the snow begins to melt, which causes the sand underneath to go from muddy to dry and loose.

SAAP is included in our Premium Plus+ plan! The insurance can be added on for an additional cost to our other insurance plans.

White car damaged after a ash and sand storm in Iceland

TP: Theft Protection

While it may not be a car accident, theft is still an accident. Things happen and Theft Protection, also known as TP, covers the theft of the rented vehicle. This is not too common in Iceland since the country is rated one of the safest in the world.

But just in case, TP is included in all of our insurance plans when renting with Go Car Rental. Did we mention there is a 0 ISK deductible too?

Tire Insurance

Tire Protection will only cover the damage to the tire or the cost of a tire repair. It will not cover the service to change the tire or a tow cost.

If a flat tire does occur, the renter is responsible for getting the vehicle to the tire shop to have the tire fixed. Tire Insurance is included in our Premium Plus+ Insurance Plan.

Go Car Rental does provide complimentary studded winter tires during winter, which run from November to April. So plan those Northern Lights road trips!

flat car tire close up, punctured wheel

What happens if you crash a rental car without insurance?

Getting into a rental car accident with no insurance is a nightmare. The driver will be the one responsible to pay for the damage to the rental car.

The driver is also responsible to pay for all of the repairs. It does not matter how high the costs are either. If you get into an Iceland rental car crash with no insurance you are one hundred percent liable.

That is why we highly encourage always having insurance for your Iceland rental car. With a nickname of the land and fire ice, you could imagine why.

Who is responsible for a rental car in an accident?

The driver is the person who signs the rental car agreement. Making the driver responsible for any rental car accidents or damage.

If you read the agreement fully, you may remember you signed a section of the fine print on the bottom. This section states that the driver is responsible for any damage that occurs to the rental car. Obviously, if you have insurance, the insurance company will pay for a nice chunk of that, if not all of it.

If you are a passenger in a rental car you will not be the one responsible for the cost. Unless you were driving at the time of the accident. Basically, if you have multiple drivers on a reservation the person driving at the time is the one liable.

Whatever you do, do not drive a rental car unless you are one of the drivers listed on the rental agreement. If you are driving and not on the agreement, you are liable. You will also not be covered by the insurance on the agreement because you were not listed as a driver.

You can save yourself a lot of money by listing the drivers and paying the extra driver costs. Adding an extra driver does come at an additional cost unless you have the Premium Plus + insurance plan, which includes one free extra driver.

Driver entering is Dacia Duster

Does Insurance Cover All Accidents?

Car rental insurance in Iceland does not cover everything, but it does cover most things that are out of your control. Such as collisions and road accidents in Iceland, which we stated above.

You will notice a lot of the things that are not covered are decisions the driver made. This includes obvious reasons such as driving under the influence of drugs or alcohol and damage due to racing a vehicle.

Here are some more common incidents that travelers should be aware of before picking up their rentals.

Off-Roading

If you are planning on driving in Iceland’s backcountry, be smart. Damage caused by driving on rough roads to the vehicles transmission, drive, and other parts that are in or attached to the chassis; damage to the chassis resulting from the vehicle scraping bottom on rough roads as a result of ridges being left by road graders; stones lodged in the road surface or on the shoulder of the road.

The same applies to damage occurring when stones are thrown up, striking the vehicle‘s underside during driving. This could include F-Roads, so always research the roads before driving on them.

If you want a 4WD vehicle check out our inventory of 4X4 vehicles. These cars are allowed on Iceland’s F-Roads. Remember it is still illegal to drive off-road with a 4X4 Vehicle, or any vehicle, in Iceland.

Suzuki Jimny crossing a river in Iceland

2WD On F-Roads

Damages to passenger cars and/or 2WD vehicles caused by driving on roads marked with an F on public maps as well as driving on Kjölur (road 35), Kaldidalur (road 550), and Dettifoss road east side (road 864). These are dangerous and rough roads, so always ask our rental car specialist before taking on certain F-Roads.

Typical Icelandic F-road in the central frozen desert of Iceland

Our Small and Midsize rental cars are a part of our 2WD Vehicles. Our fleet of Minivans are also 2WD vehicles, except for the Volkswagen Caravelle.

Wind Storms

Iceland car rental accidents can vary from collisions to weather. Damage to the door, fender, hinges, or any other part damaged due to the wind catching the doors is not covered.

Travelers should always check the weather before heading out. If you see that high winds are in the forecast, stay put. Not only is it dangerous to a vehicle but you could put your life in danger too.

Follow Traffic Laws

If you don’t follow the traffic laws and disobey Do Not Enter signs, that is on you. If you get in an accident in any of these areas your insurance will not cover it.

Damage resulting from driving in places where vehicle traffic is banned, such as paths, tracks, banks of snow, ice, unbridged rivers or streams, beaches, places only accessible at low tide, or other trackless areas. This could also result in a big ticket, so read the road signs.

Watch For Wildlife

Damage done by animals is not covered by insurance. Iceland has a lot of free-roaming animals, such as sheep. It is up to you to always be aware and alert when driving, especially through the Icelandic countryside.

Three Icelandic goats stand on the road.

Towing Your Rental Car

If your car is not drivable, you will have to get it towed. This can come with a hefty price tag depending on the rental car company.

At Go Car Rental your deductible for towing will depend on which Insurance plan you are on. For Plus+ your towing cost deductible would be 3.000 €, Premium is 2.000 € and Premium Plus is 250€.

You Got in an Accident, Now What?

The first thing to do if you get in an accident with your rental car is to call the police. Even if no one is injured, you still have to file an accident report. If there is an injury you will want to go to the nearest hospital. The police officer on site will be able to help you with that.

If the accident is bad and you need immediate assistance call 112. This is Iceland's emergency number, similar to 911 in America.

If no one is injured and you have already talked to the police, call the rental company. They will be able to talk you through the next steps.

We truly hope you never find yourself in this situation. But if you do, we want to help you through it. We recommend always checking your rental car agreement before renting a car, to make sure you have the proper contact number.

Frequently Asked Questions

Does my Geico insurance cover rental cars in Iceland?

If you are an American, Geico only covers rental cars in the United States and Canada. You will need to purchase insurance if you are traveling outside these two countries, which includes Iceland.

Should I get gravel insurance in Iceland?

Gravel protection is 100% recommended when traveling in Iceland. Even on popular routes, such as Ring Road.

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