When we rent a car, in Iceland or anywhere, we are covered by an insurance policy that covers any damage or excess charges that might occur due to an incident when using a hire car. Our policy costs just GBP 39 a year. There are several such policies available in the U.K. My guess is that most tourists don’t read the ‘small print’ on the rental agreement when they hirethe car, and pay the CDW insurance daily charge thinking that, in the event of an accident, the insurance will pay for the damage.
Unfortunately this is not the case. CDW insurance comes with an ‘excess’ charge, payable before the insurance kicks-in, which can be between GBP 500 and GBP 1500. Also there is invariably a clause that does not cover the vehicle when crossing rivers or other such ‘F-road’ use. In which event the hirer will be liable for the whole cost of repair.
Remember that the CD in CDW stands for ‘Collision Damage’!
I believe, as Ian (at Guesthouse-Iceland) does, that there is insufficient advice given to tourists when renting a vehicle in Iceland, specifically about the possible costs and liability that the hirer is taking on when they drive-off. Expecting a tourist to wade through the extensive small-print when they have just arrived in town with family and luggage in tow, is unreasonable.
I feel more should be done. Perhaps a standard script should be devised to read to all hirers at all rental agencies, explaining the details?
Tony Gomm, Winchester, U.K.