Travel insurance probably isn’t the most exciting part of planning an Iceland adventure—but it could be one of the most important.
Iceland is generally a very safe country, but unexpected problems can still happen. Flights can be disrupted, luggage can disappear, rental vehicles can break down, and Iceland’s unpredictable weather can force you to change your plans.
The best travel insurance for Iceland isn’t necessarily the cheapest policy. It’s the one that properly covers your itinerary, activities, belongings and any medical conditions you already have.
In this guide, we’ll explain what to look for, which optional extras you may need and why your GHIC shouldn’t be your only form of protection.
Do You Need Travel Insurance for Iceland?
Travel insurance isn’t normally an entry requirement for UK tourists visiting Iceland, but travelling without it could leave you responsible for significant costs if something goes wrong.
The UK Foreign, Commonwealth & Development Office recommends arranging insurance that covers your full itinerary, planned activities and possible emergency expenses.
A suitable policy may protect you against:
- Emergency medical treatment
- Repatriation to the UK
- Trip cancellation
- Cutting your holiday short
- Delayed or cancelled transport
- Lost, stolen or damaged luggage
- Certain natural-disaster disruptions
- Activities such as glacier hiking or snowmobiling
Exactly what’s included depends on the policy, so always read the wording rather than assuming you’re covered.
Does a GHIC Cover You in Iceland?
Eligible UK travellers can use a valid Global Health Insurance Card (GHIC) or certain valid European Health Insurance Cards to access medically necessary state healthcare in Iceland on similar terms to local residents.
However, a GHIC is not a replacement for travel insurance.
It may not cover:
- Private medical treatment
- Repatriation to the UK
- Additional accommodation
- Lost luggage
- Cancellation
- Rescue costs
- Disrupted travel plans
The NHS specifically advises travellers to have private travel insurance as well as a GHIC or EHIC.
Apply for your GHIC through the official NHS service—it is free.
What Should Iceland Travel Insurance Cover?
Emergency Medical Expenses
Medical cover is one of the most important parts of any policy.
Look for enough protection to cover:
- Hospital treatment
- Medication
- Ambulance transport
- Emergency dental treatment
- Repatriation to the UK
Repatriation can be extremely expensive and isn’t covered by a GHIC.
Cancellation Cover
Cancellation protection may reimburse prepaid costs if you have to cancel your holiday for a covered reason.
Ideally, your limit should be high enough to cover everything you’ve paid for, including:
- Flights
- Accommodation
- Car hire
- Campervan rental
- Tours
- Geothermal lagoons
- Airport transfers
Buy insurance as soon as you book your trip rather than waiting until the day before you fly. Otherwise, you won’t have cancellation protection during the period between booking and travelling.
Curtailment Cover
Curtailment covers situations where you need to return home earlier than planned for an insured reason.
Depending on the policy, it may help with unused bookings and additional travel costs.
Travel Disruption
Icelandic weather can affect roads, flights and organised tours.
Standard policies don’t all provide the same protection for disruption caused by severe weather or natural events. The Association of British Insurers advises checking specifically for trip-disruption or natural-disaster cover.
Look for wording covering:
- Delayed departure
- Missed departure
- Abandoned trips
- Additional accommodation
- Natural disasters
- Severe weather disruption
Does Travel Insurance Cover Volcanic Eruptions?
Don’t assume that every policy automatically covers volcanic activity.
Some policies may cover cancellation or disruption caused by a natural disaster, while others may only help if your flight or accommodation is directly affected.
Cover can also depend on when you bought the policy. Once an event becomes known or officially anticipated, a newly purchased policy may exclude claims connected to it.
Check for:
- Natural-disaster cover
- Travel-disruption cover
- Cancellation caused by official advice
- Additional accommodation and transport
- Restrictions involving known events
If the wording isn’t clear, ask the insurer before buying.
Winter Sports and Adventure Activities
A normal travel policy may not automatically cover every Iceland activity.
Check the policy carefully if you’re planning:
- Glacier hiking
- Ice climbing
- Snowmobiling
- Skiing or snowboarding
- Horse riding
- Caving
- Hiking at altitude
- Off-road tours
- Scuba diving or snorkelling at Silfra
Some activities may be covered as standard, while others require an adventure-sports or winter-sports extension.
Also check whether cover only applies when you’re with a qualified guide and using appropriate safety equipment.
What About Northern Lights Tours?
A standard guided Northern Lights coach tour usually isn’t considered a high-risk activity.
However, insurance normally won’t compensate you simply because the Northern Lights didn’t appear. They’re a natural phenomenon and can never be guaranteed.
You may only be covered if the tour itself is cancelled for a reason included within your policy.
Rental Car Excess Insurance
Travel insurance and rental car insurance are separate things.
A standard travel policy may not pay for damage to your hire vehicle or the excess charged by the rental company.
Rental car excess insurance can sometimes cover the excess you’re liable for after insured vehicle damage, but exclusions are common.
Check whether it includes:
- Windscreen damage
- Tyres
- Gravel damage
- Towing
- Lost keys
- Misfuelling
- Underbody damage
Sand, ash and wind damage can be particularly relevant in Iceland, so read the exclusions carefully.
We’ve always had excellent experiences hiring through Blue Car Rental, but you should still understand the insurance package selected with your booking.
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Campervan Insurance
Campervan rental agreements often include their own vehicle insurance options.
Your personal travel insurance may protect you medically and cover your belongings, but it may not cover damage to the campervan itself.
Before collecting your vehicle, check:
- Collision cover
- Excess amount
- Gravel protection
- Sand and ash protection
- Windscreen and tyre exclusions
- Roadside assistance
- Personal belongings cover
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Declare Pre-Existing Medical Conditions
Always answer medical questions honestly.
You may need to declare:
- Existing health conditions
- Recent investigations
- Previous surgery
- Prescription medication
- Pending appointments
- Changes in your health
Failing to disclose something requested by the insurer could affect a later claim.
Some insurers specialise in covering travellers with medical conditions, so don’t assume you’ll be unable to obtain suitable protection.
Check Your Luggage and Gadget Limits
If you’re travelling with cameras, drones, phones or laptops, check the policy’s single-item limit.
A policy might advertise £2,000 of baggage cover but only pay a much smaller maximum for each individual item.
Check:
- Single-item limit
- Total valuables limit
- Phone and camera cover
- Accidental damage
- Theft from vehicles
- Unattended-item exclusions
- Evidence-of-purchase requirements
You may be better protecting expensive equipment through separate gadget or home insurance.
Solo, Couple or Family Policy?
The best option depends on who you’re travelling with.
Single-Trip Policy
Usually best for one Iceland holiday.
Annual Multi-Trip Policy
May offer better value if you’re taking several trips within 12 months.
Couple or Family Cover
Can be cheaper than buying individual policies, but check whether everyone must live at the same address and whether they can travel independently.
How Much Should Travel Insurance Cost?
Prices vary depending on:
- Age
- Medical history
- Trip duration
- Cancellation value
- Destination
- Planned activities
- Policy excess
- Optional extras
Rather than simply selecting the cheapest quote, compare the actual benefits and exclusions.
A policy costing slightly more may provide much better protection when you need it.
Our Real Breakdown Experience
During one of our February trips, our rental car battery died just outside Reykjavík.
We waited around two hours for roadside assistance and had to pay the call-out and repair charges upfront online.
Because breakdown cover was included in our insurance arrangements, we kept the receipts and claimed the money back after returning home.
That experience taught us to:
- Understand the claims process before travelling
- Carry a payment card with enough available funds
- Keep every receipt
- Save the insurer’s contact details
- Keep our phones charged
- Carry warm layers, food and drinks
We were close to Reykjavík. In a more remote area, the wait could have been much longer.
Stay Connected in an Emergency
Reliable mobile data is incredibly useful if you need to:
- Contact your insurer
- Call your rental company
- Share your location
- Submit an online payment
- Access policy documents
- Check road or weather alerts
We use Saily eSIM, which can be installed before travelling.
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What to Compare Before Buying
Before choosing your Iceland travel insurance, check:
- Medical and repatriation limits
- Cancellation and curtailment limits
- Policy excess
- Natural-disaster and disruption cover
- Planned activity cover
- Winter-sports protection
- Luggage single-item limits
- Rental car exclusions
- Pre-existing medical conditions
- Emergency assistance availability
The best policy is the one that matches your actual trip—not simply the one appearing first on a comparison website.
Frequently Asked Questions
Is a GHIC enough for Iceland?
No.
A GHIC can help you access medically necessary state healthcare, but it doesn’t replace travel insurance and won’t cover things such as private treatment, repatriation, cancellation or lost baggage.
Do I need winter-sports insurance?
Only if your planned activities require it.
Always check how the insurer classifies activities such as snowmobiling, skiing, glacier hiking and ice climbing.
Will insurance cover a volcanic eruption?
Possibly, but only if the policy includes relevant natural-disaster or travel-disruption cover and the event isn’t excluded as already known. Check directly with the insurer.
When should I buy travel insurance?
As soon as you’ve booked your trip, so eligible cancellation protection can begin immediately.
Does travel insurance cover rental car damage?
Not necessarily.
Vehicle damage and rental excess often require separate cover through the hire company or a specialist excess policy.
Final Thoughts
There isn’t one travel insurance policy that’s best for every visitor to Iceland.
A weekend in Reykjavík requires very different cover from a winter Ring Road trip involving glacier hikes, snowmobiling and an expensive rental vehicle.
Our advice is to compare the policy wording carefully, declare all relevant medical information and make sure every activity on your itinerary is covered.
Bring your GHIC too—but remember that it isn’t a substitute for proper travel insurance.
Hopefully, you’ll never need to make a claim. But if something does go wrong, the right policy can prevent an unexpected problem from becoming an extremely expensive one.
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