Excess insurance, card cover and rental waivers in Iceland: who pays what

Last updated: 11 November 2026

Prepared by Ring Road Cars at Keflavík Airport and checked against the official sources listed at the end of this page.

A gray Nissan Qashqai, one of the Comfort cars we rent, in a parking lot, its number plate covered by a Ring Road Cars plate

Short answer

Three kinds of cover pay out in three different ways. The rental company's own waivers (CDW, SCDW, MAX) lower what the company may charge you, so there is nothing to claim. Excess insurance bought separately, from a booking site or an insurer, and the rental cover of many credit cards pay afterwards: the company still holds its excess on your card and charges it if there is damage, and you claim the money back with the documents. With us, every price on this website includes BASIC + SCDW, so covered collision damage costs you at most €1,000 per incident, plus the €150 damage administration fee, and €1,000 is held on your card at pickup; MAX (€40 a day) brings the excess to €0, with nothing held. Declining CDW keeps the price the same but makes you liable up to the car's value, with €3,000 held. No option covers river crossings, the undercarriage or the other exclusions in our terms, so check what your own policy excludes too.

Three kinds of cover, and how each one pays

Travelers often call all of these “insurance”, but they work in different ways, and the one you rely on decides what happens at the desk and after any damage:

Three kinds of cover for a rental car in Iceland
Kind of cover	Who provides it	At pickup	If there is damage
The rental company's waivers: CDW, SCDW, MAX	The rental company, under the rental agreement	The card hold depends on the option you choose (with us, it equals that option's excess)	For covered damage the company charges at most your excess, and there is nothing to claim
Excess insurance (excess reimbursement), for one trip or a year	An insurer, often through a booking or comparison site	The rental company still holds its excess on your card	The company charges up to its excess; you pay, then claim it back from the insurer
Credit card rental cover	Your card issuer, under the card's terms	The rental company still holds its excess on your card	You usually pay first and claim afterwards, within the card's limits and exclusions

A waiver changes what the rental company may charge you. Excess insurance and card cover don't: each is a separate contract between you and an insurer or card issuer, which repays you afterwards on its own terms. Your rental contract is usually with the rental company, not the booking site (ECC Spain), and cover sold by an intermediary can differ widely from the rental company's own (ECC Italy).

European Consumer Centres report renters pressed to buy extra cover at the counter, and renters charged twice for cover when the rental company didn't recognize a payment made through an intermediary (ECC-Net). Decide before you travel which cover you will rely on, bring its policy details, and don't let yourself be pushed into cover you already have (EVZ).

Excess insurance or card cover: what happens, step by step

At pickup, the rental company holds its excess on your card, whatever other cover you have. With us, that is €1,000 with the BASIC + SCDW included in every price on this website or with PLUS, €3,000 without CDW, and nothing with MAX (rental terms, clause 7). It is a hold, not a charge or a deposit.
If the car is damaged, the company charges the repair cost, up to your excess. With us, you get an email notice with photographs and the repair estimate or invoice within 10 days of the return, and nothing is charged until 20 days after that notice unless you agree in writing (clause 13). A €150 damage administration fee is added each time damage is charged, with every option.
You claim from your insurer or card issuer, with the documents listed below. You can send them our notice as soon as it arrives.
The insurer or card issuer repays you on its own terms, after you have paid the rental company (CCPC).

Your card's limit must leave room for the hold, which is largest without CDW (€3,000). After the return inspection, damage no cover option includes, such as undercarriage or water damage, is charged in full, and we may hold up to €10,000 on your card for it (clause 7). A debit card works for the hold too (Renting with a debit card).

Booked us through another website?

Your booking confirmation shows which of our cover options it includes, and that sets the hold. BASIC alone means a €3,000 excess and a €3,000 hold; a booking without CDW leaves you liable up to the car's value, with €3,000 held. At the desk you can add PLUS (€25 a day) or MAX (€40 a day); if the booking has no CDW, CDW is added with them at €10 a day (price list).

The documents a claim needs, and the ones we send

Each insurer and card issuer sets its own list, so ask yours before you travel. Consumer bodies advise keeping the rental agreement, a copy of the damage report from the return, your receipts and proof of what was charged, and the accident statement and any police report if there was an accident (Verbraucherzentrale; ECC Italy).

From us, under our rental terms, you get:

At pickup: your copy of the rental agreement (clause 9) and of the Vehicle Condition Report you sign, and our photos and 360° video of the car (clause 10).
At the return: a receipt; new damage is recorded on a Damage Liability Form that we show you (clause 13).
Within 10 days of the return: an email notice with photographs of the damage and the repair estimate or invoice (clause 13).
Before any charge after the rental: an itemized statement with supporting documents (clause 7). If the final invoice is lower than an estimate already charged, we refund the difference (clause 13).
If you ask in writing within 20 days of the notice: an assessment by an independent repair shop using the Cabas system; nothing is charged until it is done, its result binds us, and if it is lower, we pay for the assessment and refund the difference (clause 14).

After an accident, call the police (112 in an emergency) and us straight away; if another vehicle is involved, both drivers sign an accident statement, which is sent to us at once (clause 19). Keep your copy for your insurer. How to report it: Report an accident.

What to check in any excess policy or card cover

Ask your insurer, or the bank that issued your card, before you travel, and keep the answers in writing; card cover depends on the issuer, not only on the type of card (INC):

Iceland: is Iceland a covered country?
Your car: does it cover a 4×4 or SUV, a 9-seat minibus or a luxury car?
Roads: does it cover gravel roads and F-roads? With us, F-roads are allowed only in a 4x4 the booking confirms as F-road approved, only when officially open, and never on the F-roads clause 16 lists as prohibited (clause 16).
Water and the undercarriage: does it cover river crossings, water damage and damage underneath the car? No option of ours covers them.
Glass and tires: does it cover the windshield and tires, which gravel often damages?
Sand and ash: does it cover windblown sand and ash damage to paint, glass and lights?
Rental length: is there a maximum number of days per rental? One rental with us lasts at most 30 days (clause 12).
Payment: must the whole rental be paid with that card, and does a rental paid through a booking site count?
Declining CDW: must you decline the rental company's CDW for the cover to apply?
Fees: does it repay fees as well as the excess, such as our €150 damage administration fee?
Claims: which documents does it need, by when, and how does it pay you?

Our cover options, side by side

Every price on this website includes BASIC + SCDW. Here is what each option means for your excess, the hold and what you would pay us for damage the option covers (rental terms, clauses 33–39):

Ring Road Cars cover options: excess, card hold and the most you pay per incident
Option	Price on this website	Excess and card hold	Most you pay us per incident
BASIC + SCDW	Included in every price	€1,000 excess; €1,000 held	€1,000, plus the €150 fee
PLUS (adds Tire and Windshield Protection)	+€20 a day	€1,000 excess; €0 for the replacement part (a tire when only the tire is damaged, or a front windshield damaged by gravel from another vehicle; fitting and labor not included); €1,000 held	€1,000, plus the €150 fee
MAX (adds Tire and Windshield Protection and Sand and Ash Protection)	+€40 a day	€0 excess; nothing held	The €150 fee
Without CDW (if you decline it)	Same price	Unlimited, up to the car's value; €3,000 held	The full cost, up to the car's value

You may decline CDW at booking or, after seeing our decline notice, at the desk. The price stays the same, you become liable for damage up to the value of the car and extras, and €3,000 is held on your card; the Theft Waiver still applies. Our terms advise declining only if your own card or travel insurance covers rental cars in Iceland (clause 35).

No option, MAX included, pays for damage from rivers or water, to the undercarriage, to the interior, involving animals, from driving where it isn't allowed, or from windblown sand, gravel or ash beyond what SAP or MAX covers; clause 36 lists every exclusion. Such damage is charged in full, so check whether your own policy excludes it too. A waiver applies only to named drivers and only until the car is returned (clause 39).

Every option in detail: Rental car cover, Cover & extras and How damage works.

Questions about excess insurance and card cover in Iceland

Do I need the rental company's cover if I have excess insurance?

You don't have to buy more cover from us: every price on this website already includes BASIC + SCDW, so covered collision damage costs you at most €1,000 per incident, plus the €150 damage administration fee; your excess insurance may repay that afterwards, on its terms. If you would rather not pay the excess first and claim it back, MAX (€40 a day) brings it to €0 with nothing held on your card; the fee still applies. Exclusions such as river crossings and the undercarriage apply to every option.

I bought “full insurance” on a booking site. Why is a hold still taken on my card?

Because that product is a separate policy between you and its insurer, not cover from us, and Ring Road Cars sells no product under that name: our highest option is MAX, with a €0 excess and nothing held, and even with MAX the exclusions in clause 36 of our rental terms apply. The hold depends only on the cover in your booking with us: €1,000 with BASIC + SCDW or PLUS, €3,000 with BASIC alone or without CDW. If there is damage, we charge up to that excess, and the insurer may repay you afterwards on its terms.

Does my credit card cover a rental car in Iceland?

Only your card issuer can say. Ask whether its cover applies in Iceland and to your type of car, what it excludes, whether the whole rental must be paid with the card, and whether you must decline the rental company's CDW. Card cover usually repays you after the rental company has charged you. Declining our CDW keeps the price the same but makes you liable up to the car's value, with €3,000 held; our rental terms advise it only if your own card or travel insurance covers rental cars in Iceland.

What documents do I need to claim my excess back?

Ask your insurer for its list. From us you get your copy of the rental agreement and of the Vehicle Condition Report at pickup, our photos and 360° video, a receipt at the return, an email notice with photographs and the repair estimate or invoice within 10 days, and an itemized statement with supporting documents before any charge after the rental. If there was an accident, keep the accident statement and the police details too.

Does excess insurance pay for river crossings, the undercarriage or sand and ash damage?

That depends on the policy, so check its exclusions. With us, no option covers river crossings, water damage or the undercarriage, and such damage is charged in full; sand and ash damage is covered only with SAP or MAX, except in an area under an orange or red wind warning.

Do I have to pay for damage before my insurer repays me?

Yes, if you rely on excess insurance or card cover: they repay you after the rental company has charged you. With us, nothing is charged for damage until 20 days after our written notice with photographs and the estimate or invoice, unless you agree in writing, so you can send that notice to your insurer straight away.

What is the difference between CDW and excess insurance?

CDW is the rental company's own waiver: it limits what the company may charge you for collision damage, so there is nothing to claim. Excess insurance is a separate policy from an insurer: the company still holds and charges its excess, and the insurer repays you afterwards, on its terms. With us, CDW is part of BASIC and every price on this website adds SCDW, for a €1,000 excess.

Official and consumer sources

Our cover options, holds, fees and the documents we send come from our rental terms and price list (clauses 7, 9, 10, 12, 13, 14, 16, 19, 33–39 and 40). The consumer advice comes from these official and consumer bodies (checked 10 November 2026):