only my opinions here, I won't claim to know any more or less than anyone else:
Casa del conductor & rental car insurance above what bank cards and AMEX cover are - again only in my opinion - basically the same as the US$10.00 one pound bags of Cafe Santo Domingo I see in the airport shops. It is something priced at what its market will bear.
It's true that credit card insurance only covers loss (as in theft) and damage to the vehicle or property (someone else's). It's a good idea to confirm the details of coverage because more than a few insurers that service the credit card industry specficially exclude countries like Mexico and, yes, the Dominican Republic. When there is loss and damage coverage, it usuallly excludes for hire driving, anything off road (that can include a long driveway into a resort by the way), and vehicles with suspension or engine modifications. So, stick with the stock stuff.
Medical expenses are of course only covered by separate medical insurance. Interesting how seldom that subject comes up in discussions about car rentals. I'm surprised to see advice encouraging insurance against the inconvenience and discomfort of temporary incarceration but little information about what to do in the event a visitor is injured and needs to be hospitalized. Let's face it, if you get hauled off to jail it's normally because you are judged to be responsible for a very serious injury or a death. Anyway, we probably all agree it's best to take care to avoid that sort of situation. Anyway, back to casa del conductor. It doesn't even exist in most of the country. I think someone mentioned that. Where it does exist, such as Santo Domingo, it's a profitable business because of the fear based demand. I see it as a sanctioned and more organized version of the roadside shakedowns that were so prevalent in the 80s and 90s (we'll have to take you to the cuartel, you could be there hours, that legal turn you made is a very serious offense etc.). It's not nearly as frequent as it used to be but I still see and hear about it from time to time. The police play on fears to get drivers - usually foreigners - to hand over a few hundred pesos.
Back to the subject of premium insurance coverage offered by rental car companies. It is not mandatory. I've personally seen counter agents tell customers it is mandatory, but it is not. In fact, you don't have to have insurance at all if you sign a waiver. Let me be clear, I am in no way recommending that, I am only stating the facts. You sign a similar waiver to use the insurance credit card companies provide. Another poster correctly stated that the credit card insurance coverage claims are paid after the rental contract is settled and the renter pays damages, normally when a visitor is back in their home country. So, if you are on a tight budget, you might be better off paying the $20 to $30 daily insurance fee. It just about doubles the cost of a compact car rental, but if it helps relax the mind during vacation maybe it's worth it.