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My question is - are there any "gotchas" here? Would I truly be better off paying extra for the collision damage waiver? Any advice would be appreciated.

The Collision Damage Waiver covers damage to the rental car, not damage to anything else you hit. There are also certain limits on what cars are covered by the waiver, so don't rent a Corvette or certain other high end cars.

For liability, the CDW covers nothing, so you either need to purchase it from Hertz or depend on your own liability insurance, assuming you have a car. I have a co-worker who got stuck with a very large bill due to not carrying the right insurance, so make sure your covered.
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