Ever since I took out a policy with insuranceforcarhire.com I have managed to avoid the usual rip off. For £100 a year I'm covered for virtually any loss, anywhere in the world, plus I have aditional coverage for all third party liabilites beyond even what the car hire firms offer.

I just show the policy on picking up the car. The hire company knows that if they try and add any damage after the event, it will be contested, so they don't bother trying.

I can't recommend it enough. You do need to make several rentals in a year for it to be worthwhile but I have ended up saving money with it.