Another advantage of travel insurance is that most of the companies I've used have a "concierge" service that will offer assistance to their customers while on the trip. Basically they will negotiate effectively with airlines and hotels on your behalf.
One that I've used with satisfaction is AIG "Travel Guard." Their "concierge" sherpa-ed me through a negotiation with Air France a couple of years ago: got us replacement flights for those cancelled by the strike, housing and food expenses during the delay waiting for the new flights, and a rebate on my original return fare. So I ended up with two free extra days in Paris, and a free flight home (Air France refunded my original return ticket,AND paid the new return flight!). (STRANDED in Paris for two whole days! Do I hear ya weepin'?).
They also got me and my wife out of Mexico DF early and at no extra charge when they had the swine flu scare down there a few years ago and the city was being locked down.
I'm sure there are other firms worth comparing with them, but they have worked well for me. I'm using them for a trip to Italy and Slovenia this spring.
