Renting a car in Iceland comes with its unique set of challenges, not only for tourists navigating the country’s rugged landscapes but also for rental companies managing the aftermath of contractual breaches. Here are some of the primary hurdles Icelandic car rental agencies encounter when attempting to collect damages from customers who breach their rental agreements:
1. Harsh Environmental Conditions:
Iceland’s environment, with its gravel roads, sandstorms, and volcanic ash, can lead to significant vehicle damage not typically seen in other countries. This natural wear and tear complicate the process of distinguishing between normal use and damage caused by customer negligence. Insurance policies often have exclusions for such environmental damages, leaving renters liable for high repair costs.
2. Disputed Damage Claims:
A frequent challenge is the dispute over what constitutes “damage.” Some customers argue that minor dents or scratches were pre-existing or incurred in ways beyond their control. This is exacerbated by the lack of detailed condition reports at the time of rental, or when these reports are not signed off correctly by both parties. This can lead to prolonged disputes, where customers might challenge charges through their credit card companies or in small claims courts.
3. Legal and Insurance Complexities:
The legal framework for car rentals in Iceland mandates specific insurance levels, like Third-Party Liability and Collision Damage Waiver (CDW), but these often come with significant excess charges that customers must pay out-of-pocket. If customers have additional insurance through credit cards or travel policies, they might contest the rental company’s claim, leading to a back-and-forth with insurance providers that can delay compensation for the rental firm.
4. Enforcement and Collection:
Collecting damages from international customers can be particularly tricky. While rental agreements stipulate that charges can be directly billed to the customer’s credit card, refunds or chargebacks by customers can lead to financial losses for the company. Moreover, pursuing legal action in different jurisdictions can be prohibitively expensive and time-consuming, often making it impractical for smaller damages. International debt collection company as TCM Group International mitigates the cost and complexity of collecting such claims across borders.
5. Customer Misunderstanding and Miscommunication:
Many tourists are not fully aware of Icelandic driving laws, especially regarding off-road driving or the use of vehicles on F-roads, which are restricted to special 4×4 vehicles only. Even more so when crossing unbridged rivers on your rental car as no insurance policy will cover such damages. This lack of understanding can lead to breaches of contract due to unintentional misuse of the vehicle.
Drive safely.
