There's a basic principle of buying insurance: don't insure against losses you can afford. In other words, be your own insurance for losses that are not going to be catastrophic. For almost everyone, the total loss of your house would be a catastrophic loss, so you get insurance. The same goes for the kind of big liability you could create via a car accident, so you insure against auto liability. If the loss of your car would be a huge strain on your finances, you insure against loss of your car (collision & comprehensive).
The principle implies, for example, that you shouldn't ever buy extended warranties, because they're a form of insurance and basically the insurance companies know how often appliances and electronics break, which is really not often.
So by that analysis you should never get trip cancellation insurance, because vacations are a luxury item and the loss of a trip is never going to be catastrophic. Yes, there's a chance you'll have to eat the cost of a trip, but it's very low and over the course of your life if you consistently don't insure against losses you can afford, you should come out ahead. The insurance company has to make money, so the cost of insurance must always exceed the mathematical average payout for insurance.
All of that above, though, ignores the psychology of the situation. If you have a lot invested in a trip, you are not going to feel good at all if you have to cancel and eat the cost. If you saved for multiple years for your trip, or it's a "once in a lifetime" trip, the fact that it won't actually kill you or send you to the poorhouse to lose it is not much comfort.
Trip insurance will allow you to take a different trip if you have to cancel the first one, and if that helps you sleep at night, then it may well be worth it to you. This is the key fact about insurance: the financial aspect is only part of it. The intangible feeling of security is another large part, and it is actually worth money, unless you are the kind of very analytic person who can be sanguine when they have to take a big financial loss.
Also, there are situations when travelling where you could actually have a catastrophic cost, mostly due to medical issues. The biggest one is getting into a medical situation where you need to be (or want to be) airlifted to the US for treatment. That adds up very quickly. And some countries have very expensive medical care. So making sure your own medical insurance will cover you adequately outside the country is important. And if it doesn't, supplemental travel medical insurance is actually pretty cheap.
The bottom line is to think hard about how you'll feel if something comes up and you basically just lose the whole trip. If you think it's highly unlikely to happen, and even if it does you'll be able to shrug it off, then great, don't get insurance. If you know it's going to be super upsetting, you may want cancellation/interruption insurance. Obviously try to get the best deal you can, and only buy the insurance you need.
And definitely take the time to read your medical insurance and/or call your insurer and quiz them about their coverage while outside your coverage area and outside the country. Don't assume you'll be covered, or covered adequately. Some insurers give great coverage for anywhere that isn't a war zone, and others have absolutely no coverage when you're outside the US. Most are somewhere in between; they cover emergency care with some deductible, and have some amount of coverage with a massive deductible for non-emergency situations. Keep in mind that what you might consider an emergency might not match what your insurer feels is an emergency.
If anything the more times you go without collecting on the insurance the less likely you are to collect in the future.
