That wouldn't be a law then, that would be a policy with the insurance company you choose to contract with. For your reference, here is the Land traffic act. It's 19 pages and covers all the statues, powers, and penalties of driving on the road in Thailand. Up to you if you want to read it or not, I've never found anything regarding the use or limitations of a foreign drivers license though.
ASQ packages do seem to be cheaper directly with the hotel. If you're doing the sandbox though, an OTA will be cheaper per night. For me, the biggest benefit to using an OTA like Agoda is in the event of refunds or cancellations. I've seen a good number of people both flights and hotels, have trouble getting refunded when they were entitled to refunds. Thai Airways is probably the best example.