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Travel Insurance in Iceland

Everything You Need to Know About Car Insurance and Health Insurance in Iceland

When exploring the beauty of Iceland, the last thing you want is for unexpected events to get in the way. Travel insurance is not required for visitors to Iceland, but it is highly recommended. Visitors who plan to rent a car should also think about their insurance needs and options.

Here’s everything you need to know about insurance when traveling to Iceland.

Travel Insurance

Iceland does not require travel insurance for foreign visitors. Still, we highly recommend travel insurance to protect against unplanned expenses.

Travel insurance will get you home safely and swiftly in case of an emergency. It also covers you in the case of lost baggage and canceled flights. Iceland’s unpredictable weather is known to affect travel plans, so extra coverage is always a good idea. Compare different Iceland travel insurance prices here. 

Make sure that your insurance policy also covers the risk of an injury in any planned sports, such as skiing, snowboarding, or hiking. You may need to purchase special add-ons to cover these activities. 

Is Iceland part of Europe for travel insurance?

Yes. Although Iceland is not part of the EU, it is considered Europe for the purposes of taking out travel insurance. If your travel insurance policy covers Europe, that means it covers Iceland.


Where should I look for travel insurance in Iceland?

You should first check with your credit card company. Many credit cards provide insurance for cancelations and delays, lost baggage, and rental cars. 

You can also buy a policy through an insurance provider. Your needs will depend on who you’re traveling with, what you’re planning to do, and your country of origin. Shop around to find the trip insurance that’s best for you. 

Car Rental Insurance

Perhaps the most exciting way to explore the land of fire and ice is behind the wheel! However, in order to rent a car in Iceland you need to be properly insured. Make sure you’re covered before you hit the road.

Icelandic law requires that all vehicles have basic insurance. The most basic form of car insurance is a collision damage waiver. From there, you can add on additional policies.


Car Insurance for a Self-Drive Tour

All of our self-drive tours include basic insurance: collision damage waiver, personal accident insurance, and theft protection. In addition, you can purchase premium add-ons when you pick up your car. These can include windshield protection, sand and ash protection, or super collision damage waiver. 


Car Insurance for Rental Cars

If you’re renting a car on your own, you still need to make sure the car is insured. Almost all rental cars will come equipped with a collision damage waiver. If a rental car doesn’t come with basic insurance, then you should probably find a different rental company. 

Theft protection is also usually included in rental packages. Be sure to ask about all forms of insurance before signing your rental agreement. 


Do I need sand and ash insurance in Iceland?

Sand and ash insurance protects your rental car against damage caused by — you guessed it — sand and ash. Whether you need this coverage depends on where in Iceland you’re going. If you’re planning to drive in the Icelandic Highlands, then sand and ash insurance is a good idea. Sandstorms occur often enough in the Highlands to warrant extra car insurance.

Volcanic ash is less likely to cause damage to your rental car. Still, it will be included in sand and ash insurance premiums. Some rental services will include sand and ash insurance, while others offer it as an add-on. 


Do I need volcanic ash insurance in Iceland? 

In 2010, Eyjafjallajökull Volcano erupted in Iceland and caused over 100,000 flight cancelations. Since then, more tourists have become interested in insurance for volcanic ash disruption. 

The chances of this happening again are low, but in Iceland, you never know — the country has around 30 active volcanoes. Some insurance policies include volcanic ash coverage for your flights. Others offer coverage for an extra fee. Ask your insurance company whether volcanic ash coverage is included. 


Do I need gravel protection in Iceland? 

For most road trips in Iceland, gravel protection is a good idea. Many roads in Iceland are unpaved, including segments of the Ring Road. Even small amounts of gravel can cause major damage to your vehicle. Ask your rental company whether gravel protection is included. 


Do I need a special license to drive in Iceland?

No, all foreign licenses are recognized in Iceland. 


Bonus tip: The emergency number in Iceland is 112. Always call this number in the event of an emergency.