We love travel insurance and won't leave home without it. Since the very first holiday spent battling storms and re-booking missed flights (at great expense), our family has found it essential. It should be for every smart vacation planner, too, particularly when traveling with kids.  Hopefully, none of you will ever need it, but I urge you to consider purchasing family travel insurance as soon as you commit to any journey involving non-refundable fees.

What Family Travel Insurance Does for You

Travel insurance protects your vacation investment because it ensures reimbursement for costs incurred by the cancellation or early termination of your planned itinerary... for most reasons.  I recommend purchasing a comprehensive insurance plan from an independent insurer rather than a self-insured cruise or tour operator. Many insurance companies also offer, for an extra fee, a "cancel for any reason" option that would extend coverage, for example, to a family that cancelled a vacation because of a team tournament or job loss, or travelers whose return date is extended involuntarily because a quarantine is established in their home or destination country.

FTF's recommended family travel insurance packages should comprise:

• trip cancellation insurance (someone gets sick, etc. and no one goes)
• trip interruption insurance (extra expenses for hotels and meals due to travel delays, missed connections, change of itinerary) 
• baggage loss or baggage delay (kids leave expensive sneakers behind in hotel room, laptop stolen in security line)
• reimbursed medical expenses due to illness or accident of insured travelers (mom breaks her leg playing tennis, needs cast)
• medical evacuation in case of emergency (useful especially in foreign countries).

The cost is typically 5%-10% of your total trip purchase, depending on the number of days you travel and  the ages of the participants. (Sadly, grandparents cost the most.) Keep in mind that travelers who purchase travel insurance at the same time they book their trip -- prior to the issuance of hurricane or tropical storm warnings, prior to announcements that tour operators or airlines are declaring bankruptcy, prior to a viral outbreak like the one portrayed in "Contagion" -- can often protect their deposits and other nonrefundable expenses.

Family-Focused Travel Insurance Plans

Major insurers like Travelex, CSA and AIG Travel Guard provide travel insurance designed for families. You can also insure your family vacation with Allianz Classic Travel Insurance, a large multi-national company. Formerly known as Access America, their Family Insurance Policies cover all children age 17 and under at no extra fee, and their base price for coverage is very reasonable. Allianz Global Assistance USA is part of a larger company which serves millions of customers in 40 languages around the world, making them ideal for international family vacations when you want a local source for reliable help and doctor referrals.

However, you'll find that each company  has its own benefits for families. At Travelex, for example, multiple children under the age of 21 traveling with you -- even friends of the kids -- are covered at no additional cost. The under-21s have to travel with a covered adult family member, and their names and trip costs must be listed on the covered adult's enrollment form, but there's no fee for them. Travelex doesn't have child-to-adult ratios (good for single parents), no time limit on coverage purchased in advance of travel, nor are there deductibles.

If kids are traveling alone on school programs or on their own, many companies sell an insurance option that covers them too.

These companies also provide a 24/7 Emergency Hotline for questions regarding such issues as lost tickets and passports, visa information, translation services and medical and legal referrals. At AIG Travel Guard, children age 17 and under are covered at no additional cost if they are traveling with, and related to, the primary insured adult. (Note that though Travel Guard is an AIG subsidiary, industry reports say its travel business has not been affected by the financial company's bailout by the US Government.)

Quick FAQ for Family Travel Insurance Policies

Policy options vary among major carriers, as do the features they offer to protect traveling families. As Daniel Durazo of Allianz Global Assistance USA notes, "No one can adjudicate a claim before it happens. It's always best to review the policy online then call an agent if you have specific concerns about potential claims."  Read on for FAQ and some recommended insurance companies to explore.

Q.  Is my investment covered if we cancel our trip because of terrorism concerns or acts of war?

A. After the millions lost to claims in the aftermath of the 9/11 attacks, most travel insurance companies added very fine print limiting their liability in case of terrorism or acts of war. Their constantly changing policies may exclude you from the coverage your family needs.

The insurance companies vary in their terrorism coverage by defining "terrorism" differently. The same is true for unforeseeable incidents like the ash cloud over Europe caused by an erupting Iceland volcano that grounded flights for days; most insurance plans reimbursed travelers who had weather coverage. The "ratings" ascribed to incidents such as health issues like SARS or public violence like Mexico's drug wars also affect whether or not your travel coverage will be in effect. It's really best to call an agent and ask specifics if you're heading to a region that has had problems.

On the other hand, many travel insurance companies are now making "Cancel Any Time for Any Reason" policies available at a premium. These most often cover parents who have to change plans because of unforeseen business commitments, but they can cover soccer championships or just plain old travel jitters, too.

Always, before purchasing your travel package, call an insurance agent directly and ask specific "What if" questions.

Q. What if I have to cancel my airplane flight and I've purchased a non-refundable airline ticket?

A.  Some travel companies contract with insurers for an Air Ticket Protection Plan which covers your ticket cost in case of trip cancellation or trip interruption. For example, Allianz Global Assistance USA provides this service for Orbitz, USAir, Disney Cruise Lines and others.  (Flight accident and baggage delay is also covered if you purchase the same time as your flight protection.) Without this type of coverage (which has certain exclusions), most restricted economy class tickets are not refundable and not transferable.

However, the same passenger can typically apply the value of the ticket (less a change fee, typically $100-$150) for another flight itinerary within 12 months of purchase. And many other travel insurance providers will cover ticket change fees if it's part of a change in itinerary, which most cover under a basic policy. 

Always, before purchasing your travel package, call an insurance agent directly and ask specific "What if" questions.

Q. How can I protect my son or daughter who will be traveling during spring break or the summer with friends?

A. AIG Travel Guard offers StudentGuard policies for US and international students for low-cost trips of up to 14 days, offering trip cancellation or delay, baggage loss or delay, and medical protection, as well as emergency travel services.

Other companies have an option that covers students and athletes who are traveling in groups, and many tour operators offer their own.

Always, before purchasing your travel package, call an insurance agent directly and ask specific "What if" questions.