mcmpw:
http://www.cozumelinsider.com/Avis-1?From=Carrent
this vehicle comes with liability insurance from Avis. up to $2500. Depending on what credit card you have, full coverage insurance may be provided, as it is with my american express. call your card company for details
The Avis rental may indeed come with the liability insurance, but it does not come with the Collision Damage Waiver. In the US your credit card and/or your personal car insurance takes care of this, but in Mexico, you will be expected to pay cash out of pocket for any damage, and I mean
any damage, done to the car, your fault of not. This also includes items "missing" from the car, such as tire jack or spare. You did check to see if it was there before you accepted the car didn't you? You might be able to get reimbursed from your credit card or insurance once you get home, or you might not. In any case, you won't leave the island 'til you pay.
You probably won't need the CDW insurance, but it sure would suck to not have it and really need it.
For me, taxi might be the better choice. No parking hassle when you get to the pickup dock in the morning. I rented a Jeep for 4 days there in December and enjoyed the freedom I felt with having a car, but parking in town can be very difficult. Some areas where you shouldn't park are not well marked. You could come back to the car and find a license plate missing. You'll have to pay the police to get it back.
Good luck on your decision and have a wonderful time in Coz.