I've always purchased
travel insurance. It's pretty cheap, and since I've had to use it twice, it's more than paid for itself.
If you or someone you're traveling with gets sick and can't travel, the
money you spent on your trip is gone. Most tickets aren't even
transferrable - at least not without spending a hefty fee and promising
your first-born. A few bucks on insurance can be a lifesaver!
Having said that though, even with insurance, you won't get 100% of
your money back if you have to cancel, or lose your luggage, etc etc.
Taxes are non-refundable no matter what the circumstances, and you'll
still have to pay some smaller fees. Still though, if you're putting
out a big chunk of change on travel, you want to protect your
investment.