I recently took a trip to Puerto Vallarta, Mexico with my wife and rented a car for our 8 day stay. I had done the research in the past with regards to insurance and knew that as long as I use my VISA card, I should decline any extra coverage that the rental car agency offers. It turns out that in Mexico, you need at least one basic level of coverage called SLI or SAI insurance. This covers you against damage to someone else. This ran us an extra $115 on our bill. If we had gone for their full inclusive insurance, it would have been an additional $300! Way more than we paid to rent the car.
I've also read articles like this one that claim "Declining to buy the insurance (some of which is mandatory, anyway) is foolhardy to the extreme, but buying the full package without knowing what you're buying is only slightly less so." The article must be out of date or I got bad information from the person at the rental counter, but the SLI/SAI insurance was mandatory.
Well, to make a long story shorter, our brand new rental car got a nice big scratch on the side of it...
In the US, this would cost probably $1000-1500 to fix. This had me worried that we would run into all sorts of trouble at the rental car company, so on our last day, we left a bit early to take care of things. I kept thinking, maybe we should have gotten the all inclusive insurance.
When we arrived, they noticed the scratch immediately, of course. They were very nice about it and simply asked for a copy of the original rental agreement through the 3rd party company that we got the car from. They asked me to write up an accident report detailing what happened. This was a simple sentence. Then, they told me the price for the damage... only about $89! I didn't argue it. I've opened a ticket with VISA and I expect they will pay it after some period of time.
This got me thinking... the rental car place must have their own insurance which covers mishaps like this. Why in the world would anyone go with the all inclusive insurance for $300+ when simple damage can be paid for relatively cheaply by the rental car company itself. Sure, there is probably a risk of total loss of the car, but that is super rare. Even still, VISA would cover it under their own insurance.
So, unless you don't have VISA coverage, don't fret not getting the extra insurance. I'm sure others have worse stories, but this one turned out pretty well for me.