All - I thought this post on the TripAdvisor forum was very interesting and informative. It's a real-life example of what could happen in in a car accident without IPD and an uninsured driver.
Essentially, someone rented a car in Sicily. Friend arrived later but he never bother to add friend to insurance. A few days later, original poster asked friend to drive to pick up dinner. Friend was in an accident (not friend's fault). The other driver at fault was uninsured. The police charged the friend with driving without an International Driver's Permit. Most likely, the car insurance purchased by original poster is not invalid because he let an uninsured person drive a card (and without IDP).