When you go to rent a car, the person behind the counter will ask you if you want insurance coverage. Your own car insurance, however, should cover you, and that rental car coverage becomes optional. It may still be a good idea to get it, though, as long as you are aware of how the insurance works.
If you're about to rent a car, you are no doubt happy to learn that your auto insurance should cover you while you drive the rental car. However, it may cover you in a way that has you paying the rental company for damage and then getting reimbursed by your own insurance. If your regular policy is like this, consider getting at least the basic rental car coverage for exterior damage or theft. That is the type of damage most likely to require that you pay up front for repairs and then wait for reimbursement. If you want full coverage and want to be sure you are not going to have to shell out cash before insurance pays, you can certainly elect to get the additional coverage that the rental car company provides.
However, keep in mind that the rental car insurance coverage is a daily cost. You're not paying X dollars for the duration of your rental -- you're paying it per day. This is why you may want to limit the additional coverage to just the collision damage waiver policy. The cost might not look bad at first, but if you're renting for a couple of weeks or more, it can really increase your bill.
If you do elect to get the rental car coverage, double-check which policies go into effect first if there's a major problem and if the other will go into effect afterward. For example, if you get into an accident that results in costs that far exceed the coverage provided by the rental car insurance, will your policy kick in? Or will the rental car company try to make your policy cover the entire thing if you have that much coverage on your own?
Contact your insurance agent to discuss what coverage you have before you rent the car, and let him or her know that you're interested in getting the rental car insurance as well. You'll get a good idea of which of the rental policies would be good to get.