if you regularly hire cars when on holiday we can recommend insurance4carhire.com we pay £49 for the year, it covers the insured and any named driver on the car hire agreement, and it means we pay no excess when hiring any normal vehicle (this includes not having to pay the ubiquitous tyre and screen excess they always try to get you to pay at the desk on arrival) we reckon on an average of 5 weeks hire per year, we save money and have the peace of mind of knowing that any attempt to get us to stump up for sums such as those quoted on this thread will be dealt with by the insurance company - as long as we follow their policy terms.
One thing we have learned is that we walk right round the hire vehicle when we pick it up ( and look inside the boot etc) and get the company to note and sign for any defects,/scratches at the time. We then cover ourselves by taking photo's of the car on it's return to the depot. It sounds laborious, but actually only takes a very few minutes at the beginning and end of each holiday. Friends of ours handed back a car without any marks or defects only to find their credit card hit for £500 for a scratch and damage to the bumper over 4 weeks after they returned from holiday. The policy will cover such an eventuality.
NB we always ensure we have a copy of the insurance4car hire policy with us, to prove to the car hire company that we don't need to pay any excess. It has worked well for the past 18months.