Travel: Driving in Iceland with Lagoon Car Rental

I’ve been lucky enough to have the opportunity to drive all over the world but I honestly had no idea what to expect in Iceland. I just imagined being surrounded by glaciers lol, just kidding. From what I researched, I knew Iceland was cold and had some breathtaking landscapes but had no idea how my friend Carla and I were going to get around.  Thankfully, we partnered up with Lagoon Car Rental to make getting around the island easier.  I chose the Mitsubishi Outlander because it’s a great car for traveling out of the city in all road conditions. Like I mentioned before, the weather in Iceland is very unpredictable and this car had four wheel drive and great ground clearance which definitely came in handy during the winter weather conditions we experienced. 


So here are some tips you should know about renting a car and driving in Iceland:

1.  To rent/drive a car from Lagoon Car rental, the driver needs to be at least 20 years old. The driver also needs to have held a driver license for at least one year.

2. If you are picking up a car in Keflavik Airport, a representative from Lagoon Car Rental will be waiting in the arrivals for you with a sign with the Lagoon Car Rental logo and your name.  This was a life saver for us and THANK GOD the airport has great wifi.

3.  When you pick up your car, you will be required to provide your normal driving license, issued by your country of residence and your passport.


Ok, let me explain. The rental fee includes mandatory vehicle insurance, including liability insurance and accident insurance for the driver and the owner as well as a collision damage waiver. The self risk cost is 2980€ (about $3,200), self risk meaning what you would pay in cost for an accident on top of other damages. 

Additional insurance that can be added:

  • Super collision damage waiver (SCDW) lowers the deductible of the standard collision damages waiver from 2980€ (about $3,200) down to 600€ (about $635) Cost : 13€ a day. 

This was confusing for me because in the US if you purchase full coverage insurance for a rental car, you are covered but in Iceland it just lowers the deductible. So if you were to get into a wreck and did not purchase this insurance, you would have to pay the full amount of 2980€ plus the cost of any additional damages.

Other additional insurance for purchase:

  • The Gravel protection (GP) covers the windscreen, headlights and the body of the car from damages resulting from gravel or stones that can hit the vehicle by another car. The self risk is 98€ (about $103). Cost 11€ (about $12) a day.
  • Theft protection (TP) covers the theft of rental vehicle. The self risk is 0€. Cost 5€ (about $5) a day.
  • Sand and ash protection (SAAP) offers insurance against damage due to ash and sandstorm damages to the paint of the car, windows, lights and plastic. The self risk is 600€ (about $633). Cost 9€ ($9.50) a day.
  • Insurance bundle:  includes all the insurance coverage offered at a discount. It includes the SCDW, SAAP, GP and TP for the cost of 32€ (about $34) per day.

** We went with the most common issues and purchased the super collision damage waiver and the gravel protection.

5.  If you have a great data plan on your phone, use you Google maps to for directions.  We ended up getting an Icelandic GPS but it was kind of confusing for me to understand and to type in certain Icelandic letters.

6. Beware of speed traps!  I could not understand what some of the signs said but if you see a blue sign with a white camera – follow the speed limit!  Speeding tickets are extremely expensive and the last thing you would want to spend your money on is a ticket.



During our road trip, we came across an Icelandic horse farm!  They totally look like ponies but they are just that small.  




We took full advantage of the beautiful landscapes to take some pictures like most bloggers do 🙂


All in all, I’m so glad we were able to drive around Iceland and just explore.  It gave us the freedom to enjoy everything at our own pace without an itinerary.  A HUGE thanks to Lagoon Car Rental for providing us with such a great vehicle to make this road trip worthwhile and special.

Disclaimer: This post is in partnership with Lagoon Car Rental however, all thoughts and opinions expressed are my own.