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Is was told I cannot add snow chains on my Hertz Altima while crossing the Sierra Nevada's if CalTrans orders it. If I do so, I will void the insurance.
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You were "told"?
What does the rental contract say?
I found a contract for Thrifty. It doesn't say you can't use chains, it says you are liable for any damage caused by chains.
Chains are mentioned twice in the contracts. See 3.3(c) and 9.1(p).
Read your Hertz contract.
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Why would they have such a stupid requirement?
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It's not stupid. Chains can damage tires and the car.
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I guess they prefer a car totlled in the snow
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I'm sure they wouldn't. So buy the damage waiver. Just understand that you might be liable for the total loss if you put chains on the car.