1) I have never taken travel insurance EVER ! and have never had any reason too, although when I left Narita it was the day the Chinese Fed-Ex plane crashed and burned. Every flight was on hold but I got out, thank you Delta
2) As far as carrying that much money around ... RELAX ! Seriously it's not an issue, staying at hostel however ... well you want to use the common sense vs a hotel, as you would be dealing with other people such as yourself vs Nationals