Most travel insurance companies recommend you purchase insurance for the full prepaid, non refundable trip costs.  In the event you insure for a reduced amount, the maximum amount payable in the event of cancellation will be limited to the amount insured.  In addition,  some policies require that the full prepaid costs be insured for certain benefits such as “cancel for any reason” and “pre-existing conditions”.  Refer to the policy certificate for full details prior to purchasing.