First off, there are a great many Travel Insurance companies and/or types of policies that are available. It's important that you read and understand the terms and coverages offered by the policy you purchase to be sure it covers the risk you wish to insure against.
Almost all of the "major" travel insurance companies are very reputable and filing claims is generally easy and getting a settlement is relatively quick. We've purchased Trip insurance on some occasions and had to put in a claim once. We had no problems.
You can compare policy terms and premiums for all just about every major company's policies at www.insuremytrip.com. Once you choose the policy that right for you you can purchase the policy on-line, if you wish. The insuremytrip website is the most comprehensive place to go for Travel Insurance - everything you need to know is spelled out there.
Again, there are many different types of Travel Insurance ranging from Trip Cancellation to Medical Evacuation and everything in-between. Read and understand the policy terms and fine print carefully before you purchase.
Source: http://www.fodors.com/community/air-travel/flight-and-travel-insurance.cfm
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