Great Question Tim! You do have coverage under your personal automobile policy for a non-owned auto, for the same coverages you have on the highest covered vehicle in your household. What I mean by that is, the one with the best coverage (i.e. $100 comprehensive and $500 collision deductible vs. a liability only vehicle).
However, there are some things you should know about charges the rental agency can pass along to you that are NOT covered by your personal auto policy. While we will pay for the damage to the rental vehicle to repair it, the rental car company may not want to do that as they state the vehicle’s value will be diminished. They can charge you for that valuation, which is called diminished value. Many auto policies do not cover diminished value, nor do they cover the fees they may assess you for having a vehicle out of service from their fleet. To a client who had damage to a rental vehicle, they have charged a $750 administrative fee to have to deal with settling the claim.
Another issue some people may not be aware of, is the fact they can put a hold on your credit card until they receive payment for a loss. If you travel with only one card, that could wreck your vacation.
If you happen to buy the insurance at the rental car counter, if you happen to have damage to the vehicle, you will be able to walk away with a new vehicle and not have to deal with the claim adjustment from your carrier. If you were at fault, it would also mean you would not have to pay your deductible - or any of those extra fees.
Some people feel it is worth it to buy the insurance, while others do rely on their own personal auto policy and some perks extended to them by their credit card company. It is best to check out both policies so you know what type of coverage you have before you rent a vehicle. The Denver Post published an article regarding Comparison of rental car policies. You can visit their website to read more about what they can charge you for should you damage their vehicle.