All of what has been said under travel insurance applies also to holidays.
Holiday insurance is often included in the price of a package holiday or offered as an optional extra. It is generally very well worth having. One valuable part of the package is cover against your having to cancel the holiday, e.g. through illness. If a family member' is ill and you can't go away, you could find yourself paying in full for a holiday you never had.
There may also be cover against your being involved in a lot of hassle, delay and extra expense because of a strike by one of the essential services, which is, alas, a frequent hazard these days.