Should I Buy the Insurance Offered by the Rental Car Company? Whether you should buy the Collision Damage Waiver (CDW), depends greatly on your tolerance for risk and inconvenience.
The CDW relieves you of any liability for damage to the vehicle as long as the terms of the rental agreement are not breached.
If you buy the CDW you can take a damaged car back to the rental company and walk away.
If you don't buy the waiver, the rental company will add the estimated damage amount on your credit card pending settlement by your auto insurance company.
A lengthy settlement could impair your credit.
What protection will my personal auto insurance policy provide? Most policyholders who carry full coverage automobile insurance, (liability, comp, collision), would have the same coverage and limits apply automatically to a rental vehicle.
Coverage would extend to anyone traveling with you provided the car was rented in your name.
It is important to note that your auto policy is "excess" over any insurance carried by the rental car company and is subject to deductibles.
"Excess" means the coverage will apply only after the limits of the other policies have been used up.
What coverage does the CDW provide? The CDW protects you from financial responsibility for theft or damage to the car while under your control.
What does it not provide? The CDW does not cover your personal liability for bodily injury and property damage.
Protection for these potential claims would be covered by your personal full coverage automobile insurance policy.
What about the automatic coverage now provided by some credit cards? This "free" coverage is generally "excess" over that available from the rental company or your own personal auto policy.
Like the rental coverage, the credit card CDW covers only theft or physical damage to the vehicle.
Practical Advice

Deal only with rental companies that carry some liability insurance and which permit the purchase of a CDW.

Be sure the vehicle is operated only by "authorized operators", as defined in the contract.

Read the contract for other limitations such as operation in Mexico or another state, operation off paved roads, towing restrictions, etc.

Please refer to your specific auto insurance policy to make confirm coverage when renting a vehicle.
Automobile policies can vary greatly from between insurance companies and some insurance companies have added new limitations and exclusions with regard to rental car coverage.
Auto insurance policies with these types of exclusions may save you some premium dollars, but they also take away some very important coverages.