Originally Posted by JLewisinSyr

If you do not have any sort of liability coverage that transfers to a rental car (i.e. Umbrella coverage), the car company will typically carry it for you in the form of state required minimums for the car to be registered and driven in the state (CA is a bit weird on this one, so if its a CA rental, I'd do more reading).

Though the car company is required to carry it, note, if they have to use it, you will be required to pay them back. In other words, you get into an accident and are at fault. Your card will pay for the rental car damage, but it won't pay for the damage to any other property or person (the liability portion). The car rental company will most likely pick up the cost (if self insured or insured through a carrier), but then will turn around and go after you for the amount paid out (subrogation).

Now the question comes, is the risk worth it to you to purchase some sort of coverage to protect you in the event of a liability claim while renting a car. If you purchase the ALI, it typically is excess, but when there is no additional coverage present, it becomes primary (not that dissimilar to secondary rental car coverage provided by most credit cards).