1.    Territorial and Temporal Scope of Insurance Coverage

1.1. This insurance policy is operative within the geographical confines of Iceland for the duration of the vehicle rental period. 

1.2. Should there be an extension of the rental period arising from unforeseen and compelling circumstances beyond the lessee’s control, the policy’s validity extends to include one additional day.


 2.    Extent of Insurance Protection

2.1. Insurance coverage, as delineated in the rental agreement, shall encompass the stipulated protections. 

2.2. This policy extends to include mandatory third-party liability insurance for bodily harm and property damage caused by the insured vehicle, alongside personal accident insurance for the operator, in adherence to Icelandic statutory requirements. 

2.3. Insurance Coverages: 

2.3.1. Collision Damage Waiver (CDW): The CDW provision mitigates the renter’s financial responsibility for vehicular damage, limiting it to the excess amount specified in the rental agreement, excluding circumstances of theft, burglary, or conditions outlined in sections 3.2.1 – 3.2.13. Absent of CDW, the renter is fully accountable for all damage costs, up to the vehicle’s total valuation. 

2.3.2. Super Collision Damage Waiver (SCDW): As a supplement to CDW, SCDW further diminishes the obligatory excess payment down to 150.000 ISK. The conditions of exception align with those under CDW. 

2.3.3. Theft Protection (TP): Incorporated within CDW/SCDW without additional charge, TP limits the renter’s liability for vehicle theft or burglary to the excess amount designated in the rental contract. It does not insure personal property within the vehicle against theft or burglary. TP exclusions necessitate renter accountability up to the vehicle’s full value and mandate theft or burglary reporting to law enforcement by the renter. 

2.3.4. Gravel Protection (GP): covers the vehicle against damages to the paint on bumpers, hood and doors caused by a passing vehicle (excluding Windshield)

2.3.5. Sand and and ash protection (SAAP): covers the vehicle against damages caused by volcanic ash and sandstorms. Self-excess for SAAP is 150.000 ISK if purchased the Gold Package and 0 ISK if purchased with Platinum Package  

2.3.6. Tire Damage (TD): covers the vehicle for flat tires and is only included in the Gold and Platinum Insurance packages. Can be reduced to 90.000 ISK by purchasing Gold and Zero ISK by purchasing the Platinum Insurance.  

2.3.7. Windshield Protection (WP): covers the the vehicle against damages to the Front windshield. Windshield excess is 150.000 ISK and can be reduced to 90.000 ISK by purchasing Gold and Zero ISK by purchasing the Platinum Insurance.


3.    Limitations of Liability for Infringements of Safety Protocols or Insured Duties

3.1. Responsibilities of the Insured: 

3.1.1. The vehicle operator must possess a valid driving license for the relevant vehicle category. 

3.1.2. Upon departure from the vehicle, it must be secured, and keys must be kept from unauthorized access. 

3.1.3. Items within the vehicle should be stowed securely to prevent damage. 

3.1.4. The vehicle must not be employed for competitive speed trials or racing. 

3.1.5. For damages beyond the CDW/SCDW scope, the insured bears full fiscal liability as per the rental company’s pricing or cost assessment. 

3.1.6. The lessee or operator is obliged to furnish a comprehensive account and endorse the damage documentation to invoke coverage efficacy. A refusal or failure to comply may render the damage waivers void, compelling the renter to compensate up to the vehicle’s full market value.

3.2. Exclusions Under CDW/SCDW: 

The following circumstances are exempt from coverage: 

3.2.1. Damage owing to war, revolution, civil unrest or rioting. 

3.2.2. Damage inflicted by animals. 

3.2.3. Damage to seats, carpets, mats or other parts of the interior. 

3.2.4. Damage affecting only wheels, tires, suspension, roof, batteries, glass (except for windscreens when additional coverages is purchased), radio receivers, charging cables, charging ports or adapters. 

3.2.5. Damage to the vehicle’s parts, other than body panels, when the vehicle bottoms out while driving on rough or uneven road surfaces, including but not limited to causes like; ridges left by road graders, stones lodged in the road surface or at the edge of the roadway, speedbumps or potholes. The same applies to damage resulting from loose rocks hitting the vehicle or the bottom of the vehicle whilst being driven. 

3.2.6. Damage affecting only batteries and/or electric motors of electric and hybrid vehicles including but not limited to causes like; incorrect charging, collision, bottoming out, driving on rough roads. 

3.2.7. Damage resulting from driving in places where the vehicle is not permitted to be driven, such as tracks, rough trails, in snowdrifts, on ice, across un-bridged rivers or streams, on beaches, on causeways accessible only at low tide or in other off-road areas. 

3.2.8. Damage caused by wind or damage caused by sand, gravel, ash, pumice, or other earth material being blown onto the vehicle. Additional coverages, lowering the excess amount for such damages is offered by the rental company for an additional fee. 

3.2.9. Any damage occurring while driving in water, rivers, streams etc. or any damage caused by water flooding the engine or other components of the vehicle. 

3.2.10. Damage caused by sea spray/seawater if the vehicle is transported by sea. 

3.2.11. Loss of parts of the vehicle which fall off while driving. 

3.2.12. Damage resulting from gross negligence entails that the right to compensation lapses. 

3.2.13. Damage to engine or other mechanical parts due to lack of or incorrect use of; lubricants, oil, coolant or fuel. 

3.2.14. If the rental company needs to collect the vehicle, or have it collected, owing to a collision or an accident, the renter shall bear all costs thereof according to the tariff of the rental company at each time. 

3.2.15. In other respects, reference is made to the general terms and conditions for CDW coverage.

4.    Insurer Information

4.1. The insurance underwriter is Vátryggingafélag Íslands ehf, with the organizational identifier 690689-2009, located at Armuli 3, 108 Reykjavik, Iceland. 

4.2. Volcano Car Rental functions solely as an intermediary for insurance services.

    5.    Resolution of Disputes

In instances of dissatisfaction with the insurer’s response, the insured is entitled to consult the Insurance Ombudsman or the Consumer Agency of Iceland at Borgartún 29, 105 Reykjavík (Neytendastofa) for arbitration.

Compare our coverages

Collision Damage Waiver (CDW) ISK 350,000 ISK 150,000 ISK 0
Third-Party Liability (TPL) ISK 35,000 ISK 0 ISK 0
Windshield Protection (WP) ISK 150,000 ISK 90.000 ISK 0
Theft Protection (TP) ISK 0 ISK 0 ISK 0
Gravel Protection (GP) ISK 0 ISK 0 ISK 0
Sand & Ash Damage (SAAP) Not Covered ISK 150,000 ISK 0
Tire Damage (TD) Not Covered ISK 90.000 ISK 0
Included 4.900 ISK
Per day
7.900 ISK
Per day

About Coverages

Third Party Liability Insurance

Third party liability is equivalent to the amount stipulated by Icelandic law at each time. This also applies to the amount of individual driver liability. Third-party coverage and personal accident insurance is included in your rental.

Damages Not covered by any Insurance

- Intentional damage or damage due to gross negligence on the part of the driver - Damage resulting from the driver being under the influence of alcohol, stimulants, or sedatives, or in any other way incapable of driving the vehicle in a safe manner. - Damage due to race or test driving - Damages resulting from driving in places where vehicle traffic is banned, such as paths, tracks, banks of snow, ice, unabridged rivers or streams, beaches, places only accessible at low tide, or other trackless areas - Damage due to natural forces, war, revolution, civil unrest, or riots. - Wind damages caused by nature (sand and ash storms), - Holes burned into seats, carpets, or mats - Damage to vehicles caused by driving where prohibited by law as explained above at point 8 in the Obligations of the Renter. - Damage caused to the tires, chassis and undercarriage of a vehicle and water damage caused by driving in rivers, lakes, or the sea. These can be caused by driving recklessly on rough roads, damaging the vehicle´s transmission or other parts that are in or attached to the chassis, by scraping the bottom of the car on ridges left by road graders, on stones lodged in the road surface or riverbanks or on the shoulder of the road. The same applies to damage occurring when stones are thrown up, striking the underside of the vehicle during driving. Pumping wrong fuel in the tank - Damage caused to the roof of the vehicle by irresponsible actions such as climbing on top of the car, putting heavy objects on the roof or any other negligent behavior that is not a direct result of an accident or force majeure event. Full details can be found in our Rental Agreement.

Theft Protection

Theft protection (TP) covers theft of the rented vehicle. Deductible: 0 ISK

Gravel Protection

Gravel protection (GP) covers the vehicle against damages to the paint on bumpers, hood and doors caused by a passing vehicle (excluding Windshield)

Sand & Ash Protection

Sand & Ash Protection covers the vehicle against damages caused by volcanic ash and sandstorms. Self-excess for SAAP is ISK 90.000 if purchased the Gold package and ISK 0 if purchased with Platinum package.

Tire Insurance

The tire insurance covers the tires and the wheels. In the case of a flat tire, the renter is responsible for changing the tire and putting on a spare wheel. In case of the renter not being able to do so the renter is responsible for transporting the vehicle to the nearest tire shop to have the tire replaced or fixed.

Damages caused by Animals

No regular car rental insurance in Iceland covers damages done by animals, e.g. horses or sheep. This insurance covers those damages