Here's my opinion, certainly not the official word, but my opinion.
This may vary from state to state or based on individual insurance policies, but I think most auto policies cover you no matter what car you are driving. If that's the case I don't see why you even have to tell the rental company you will be driving the car. I know they want you to tell them so they can charge you extra, but from your stand point I think it's just the liability issue if you are driving and something happens.
My insurance agent told me that a rental car is treated as a temporary replacement vehicle, so it's insured just like my vehicle. You and your friends should contact your insurance agents to verify your situation, but I think you will find out you are covered.
And, I'm not sure why else you need to even notify the rental company of the additional drivers.