Dollar Car Rental Iceland Protection Packages

When you’re exploring Iceland — from frosty highlands to coastal roads — the unexpected can happen. That’s why at Dollar Iceland, we offer flexible protection packages designed to shield you from surprises and let you focus on the adventure. Whether it’s gravel, ash, wind, or other road hazards, our coverage options help minimize your financial risk so you can drive with confidence. Choose the level that fits your trip, and enjoy Iceland knowing you’re protected.

• (CDW) Collision Damage Waiver – Included in the online rate

  This option lowers your financial responsibility for damage to the Dollar vehicle, including its parts and accessories, except for the windshield, glass, undercarriage, tires, theft, attempted theft, or vandalism — provided the vehicle is used according to the terms and conditions of the rental agreement.

  If you choose to decline CDW, you will be liable for damages up to the full value of the vehicle.

  CDW Non-Waivable Excess (N.W.):
  All rentals include a non-waivable excess, which varies by vehicle group. This is the portion you remain responsible for if the Dollar vehicle is damaged during the rental period. The applicable N.W. amount can be found in our current price list.

• (SCDW) Super Collision Damage Waiver

  Purchasing SCDW in addition to CDW further reduces the non-waivable amount covered under CDW protection. Please note that SCDW does not decrease the non-waivable excess for any other coverage beyond CDW.

  The non-waivable (N.W.) amount is determined based on Dollar Iceland’s current price list.

• Theft Protection

  This option limits your financial responsibility in the event of loss or theft of the Dollar vehicle, including its parts and accessories, as long as the vehicle is used in accordance with the terms and conditions of the rental agreement. If TP coverage is declined, you will be liable for the repair or replacement costs of the Dollar vehicle following theft, attempted theft, or vandalism, up to the vehicle’s full value.

  TP Non-Waivable Excess (N.W.):
  All rentals include a non-waivable excess fee (N.W.), which varies depending on the vehicle category. This is the portion you remain responsible for in the event of loss or theft of the Dollar vehicle during your rental period. The applicable N.W. amount can be found in our current price list.

• (WSP or WP) Windshield Protection

  This option eliminates the renter’s financial responsibility for damage caused by gravel impacting the front windshield or headlights.
  Please note that this coverage does not apply to damage resulting from sand or ash storms.

• (SAAP) Sand and Ash Protection

  This option lowers your financial responsibility for damage caused by ash, sand, or other earth materials blown against the vehicle. Without this protection, the renter is fully liable for all related repair costs, which may include window or headlight replacement and repainting of the vehicle. SAAP coverage can be added during the booking process on our website or at the rental counter.

  SAAP Non-Waivable Excess (N.W.):
  All rentals include a non-waivable excess (N.W.), which varies by vehicle group. The specific amount is listed in Dollar Iceland’s current price list.

• List of Damages That Aren’t Covered

  Payment of an own-risk fee (CDW or SCDW) does not remove the renter’s financial liability for damage to the Dollar vehicle in the following situations:

  a. Damage caused intentionally or through gross negligence by the driver.
  b. Damage occurring while the driver is under the influence of alcohol, drugs, or otherwise unfit to drive safely.
  c. Damage resulting from racing, testing, or similar unauthorized use.
  d. Damage caused by war, civil unrest, revolution, or riots.
  e. Damage caused by contact with animals.
  f. Burns or holes in seats, carpets, or mats.
  g. Damage limited to wheels, tires, suspension, batteries, glass, radio equipment, or theft of individual parts and related damage.
  h. Damage caused by rough or uneven roads (e.g., to the transmission, drive shaft, oil pan, engine, or chassis), including damage from rocks, gravel, or road edges, as well as loose stones striking the underbody, radiator, or vehicle exterior.
  i. Damage resulting from driving in prohibited areas, including snowbanks, unbridged rivers or streams, beaches, tidal areas, or any other off-road terrain.
  j. Damage to passenger vehicles driven on F-roads or restricted highland routes such as Kjölur (Route 35), Kaldidalur (Route 550), or Landmannalaugar (Route 208).
  k. Damage caused by sand, ash, gravel, pumice, or other earth materials blown against the vehicle.
  l. Damage from seawater exposure, including when the vehicle is transported by sea.
  m. Any loss incurred if the vehicle is stolen.
  n. Water damage to the vehicle.
  o. Any use of the vehicle that breaches Icelandic law or the terms of the rental agreement.

• Credit Card Insurance

  If the renter chooses to rely on their credit card for insurance coverage, we strongly advise reviewing and fully understanding the terms and conditions provided by their credit card company before declining any of Dollar Iceland’s optional protection packages.

• Damage Car Transport and Replacement

  The renter is always responsible for the cost of transporting a damaged vehicle. This fee is calculated per kilometre, with a minimum charge listed in Dollar Iceland’s current price list. Please note that replacement vehicles are subject to availability.

	Basic Protection package	Medium Protection package	ZERO excess Max Protection package
Third Party Liability (TPL)
Collision damage waiver (CDW)
Super Collision Damage Waiver (SCDW)
Theft Protection
Windshield Protection/Headlights
Gravel Damage
Windows & Glass/Side Windows
Sand & Ash Damage (SAAP)
Tires & Wheels

*Damage to the undercarriage, as well as any damage resulting from river or water crossings or off-road driving, is not covered by any protection package. No insurance option is available to cover these types of damages.

Our available Small Cars, Family Cars, Crossover, and Mid-sized SUV in Iceland

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Our available Electric, Large SUV, 4×4’s, and Minivans in Iceland

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Recommended Car Rental Protection Package in Iceland

When exploring Iceland, zero excess coverage from Dollar Iceland offers complete peace of mind behind the wheel. Iceland’s roads can be unpredictable — one moment you’re driving through sunshine, the next you’re facing strong winds, gravel spray, or sudden rain. With zero excess coverage, you’re protected from costly surprises like chipped windshields, scratches from flying stones, or dents caused by tough road conditions. It means you can focus on the journey, not the potential repair bill. Enjoy every waterfall, mountain pass, and lava field knowing that if the unexpected happens, you’re covered.

Please note: damage to the undercarriage, or any damage caused by river crossings, water exposure, or off-road driving is not covered by any protection plan.

FAQ about Dollar Car Rental Protection Packages

• Do I really need car rental insurance in Iceland?

  Yes — car rental insurance is highly recommended in Iceland. The country’s weather and road conditions can change quickly, and even experienced drivers can face gravel damage, wind-blown doors, or volcanic ash storms. Basic Collision Damage Waiver (CDW) is usually included, but most travellers add extra coverage for peace of mind.

• What does CDW (Collision Damage Waiver) cover?

  CDW reduces your financial responsibility if the rental car is damaged in an accident. However, it doesn’t cover everything — damage to tires, the undercarriage, windshields, or from river crossings and off-road driving are typically excluded. You’ll still be responsible for a “non-waivable excess” (own-risk fee) unless you upgrade your coverage.

• What is SCDW, and should I buy it?

  SCDW (Super Collision Damage Waiver) further reduces your financial liability beyond the standard CDW. It’s a smart choice if you want lower out-of-pocket costs in case of an accident. While it doesn’t cover every scenario, it gives you extra protection and reassurance during your Iceland road trip.

• Do I need gravel or sand and ash protection?

  Yes, these are two of the most useful add-ons in Iceland. Gravel Protection (GP) covers chips or cracks from flying stones, which are common on Icelandic gravel roads. Sand and Ash Protection (SAAP) covers paint, glass, and light damage from wind-blown volcanic materials — something that can cost thousands to repair if uninsured.

• Does my credit card insurance cover car rentals in Iceland?

  Some credit cards offer car rental coverage, but not all include Iceland or its unique conditions. Before declining rental insurance, check your card’s policy carefully — many exclude gravel, sand, and ash damage or require you to pay the rental in full with that card for coverage to apply.