There are always many risks involved with traveling outside your own country and travel insurance for Europe is essential, despite the fact that you may think it is not a very "exotic" location. You may always fall ill, suffer an accident, or have a sudden change of plans, no matter where you are in the world. The peace of mind that you purchase with travel insurance for Europe is, in my mind, absolutely priceless. Just think about it: when you are on holidays, you simply want to be able to have a carefree time without needing to worry in the back of your mind. Of course, should anything detrimental actually occur, it may spoil your vacation regardless. However, the degree to which it may affect you will be determined by your travel insurance coverage.
There are many types of coverage for travel insurance to Europe. There is medical coverage for illness and accidents, trip cancellation / interruption coverage for unforeseen circumstances that alter your plans and baggage insurance for your possessions. You must determine what you may require for yourself because the combinations of coverage are many. In general, it is always a good idea to purchase some form of medical insurance, even if it is the most basic coverage. You do not want to have to pay out of pocket for hospital and medical bills if you become sick abroad. If you have chronic conditions or are of a certain age (over 50) then it is smart to purchase further protection with a more comprehensive medical plan.
Trip cancellation / interruption coverage is also pretty standard for travelers. People think that they do not need it, but the twist of irony is that it covers "unforeseen" circumstances. Hence, you are unlikely to predict that you will require this coverage. For example, imagine if a close relative died all of a sudden. If you need to get home, of course you will forfeit the rest of your trip because of family priority. But, it is best to protect yourself beforehand and to be able to recover your costs later with travel insurance to Europe that has trip cancellation / interruption coverage.
Baggage insurance is an iffy one. The airlines usually cover you for a certain amount, ranging from $ 600-3000; they are liable to give you some sort of compensation if they lose your bag. That being said, certain travelers carry very expensive items around like top-of-the-line cameras. If this is you, then you need to consider taking out additional travel insurance for Europe to cover your particularly dear luggage. Otherwise, I would not worry excessively about having baggage insurance for Europe.