You insure you car, your house, your valuables. Why? Because they’re valuable. A vacation is no different. You insure what you can’t afford to lose and replace. If you have $5,000 invested in your vacation and something happens, that money is gone unless you have insurance.
You also need to be aware of foreign medical expenses which can be astronomical. Many health insurance plans do not cover you outside of the country. If you have any health issues that may arise or job issues that may come up or there’s any chance that you could not go on your vacation, you need travel insurance. Personally I look for insurance that has “cancel for any reason” coverage with it.
Some credit card companies will provide you with a certain amount of coverage if everything is paid through them.
Personally I recommend insuremytrip.com – You can put in your criteria and everything you want then it will give you a list of insurance carriers as well as their prices.