Yes, your rental car is covered by insurance if you have elected the rental car endorsement, and you are in a covered accident.
You also have to have comprehensive and collision coverage on your policy for rental car coverage to be added. With a liability only policy, rental car coverage is not an option.
If someone else is at fault in an accident, and they have proper insurance, then their carrier should provide you a rental car.
No, rental car coverage is not provided for things like normal wear and tear, or routine maintenance on your vehicle. If you have to put your car in the shop for a repair, rental car coverage would not be provided.
Rental car coverage is also not provided for recreational rentals, such as a weekend get away rental. You would not be able to use your insurance coverage for something like that.