I think we should be taking out insurance for the worst case scenario - having said that we have insurance through our uk Amex Plat cards which basically covers us for everything but preexisting conditions.
In the worst case scenario example a family I knew who with friends had bought houses in the same development in Khao Lac and had arrived there just before Chrostmas 2004, the guys had gone off to play golf behind the resort when the Tsunami hit. On returning the father of the family I know met a truck on which he saw his badly injured daughter - he quickly followed the truck, phoned his friend in London to go to his house, retrieve the documents for his travel insurance from the drawer in his office and within a couple of hours his eldest daughter was being airlifted to a hospital in Singapore. She survived and has gone on to lead a full life.
In the U.K. I do think we tend to take out insurance more than other nationalities as we've heard the horror stories of those who need medical treatment abroad - mainly the US.