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Well, more specifically it is protecting against a specific form of data loss, which is hardware failure. A good practice if you're able is to have RAID and an offsite/cloud backup solution.
But if you don't, don't feel terrible. When the OVH datacentre had a fire, I lost my server there. But so did a lot of businesses. You'd be amazed at how many had no backup and were demanding that OVH somehow pry their smouldering drives from what remained of the datacentre wing and salvage all the data.
If you care about your data, you want a backup that is off-site. Cloud backup is quite inexpensive these days.