When insurance can be child's play

DISASTERS CAN happen whether you've paid your insurance premiums or not. But, financially at least, insurance can save you from the worst consequences of catastrophes. And while you are still supporting children, their mishaps could be yours, too.

Do they need to be covered by your insurance? Whether you take out private medical insurance often depends on your politics. But if you do opt for PMI, adding children to the policy is often only a minor extra expense. Children are far less likely to require costly medical attention than adults, so premiums are only a fraction of adult rates. "You can sometimes automatically have your children included, which can be useful if it is at no extra cost," says Philippa Gee, of Gee & Company. However, if it is free to include children, you should look closely at the policy and compare it with its competitors to see if this "perk" is actually built into the prices, she says.

More than 6 million people in the UK now have PMI, according to figures from the Association of British Insurers. Tales of waiting lists and a lack of confidence in the NHS have boosted interest in private cover. Most PMI policies are sold as job perks; BUPA says 60 per cent of those covered by its medical insurance are on company schemes. It is often possible to upgrade this cover to include your children, even if your employer does not pay for family insurance.

PMI policies vary enormously in the level of cover they provide. So-called deluxe plans include dental, optical, maternity and alternative therapy, while budget plans often do not cover out-patient care.

When your children learn to drive, choosing how to insure them can make a vast difference to premiums. If they are still at the stage where they simply drive your car occasionally, you can insure them on your existing policy. But if they have their own cars, they have to be insured separately, and the cost can be huge.

Flying the nest for the first time, students' possessions are sometimes covered under their parents' home contents insurance. This is only the case if the student regularly comes home during vacations, as an insurer would view this as temporary removal of household contents.

However, if the student stayed away on a more permanent basis in a rented flat, for example, he or she may have to take out a separate contents insurance policy. "If they are living away from home it will normally be part of a lease agreement that they have their own tenants' insurance," says Philippa Gee.

One thing to remember about insurance is that providers play on our fears to sell it. "If you took every type of insurance available, you'd have absolutely no money left at all," says Philip Telford of the Consumers' Association. When deciding what type of insurance you need, check what cover you already have and work down a list of priorities, he says.

Dental insurance, for example, might be low down on the list. "Is it a big disaster if you have to pay for a couple of fillings? Not as much of a disaster as not being able to work a few months," he says. State benefits are diminishing as the role of the state retreats, but you have to be careful not to get sucked into buying every type of insurance.

Keep Your Offspring Under Your Wing

n Check if you can add children free of charge to your private medical policy.

n If not, would it be cheaper to switch to a policy that allows children to be added at low charges?

n Check what policies do and do not cover when comparing de luxe and budget insurance plans.

n Ask if you can add your children to your car insurance. It is usually much cheaper than if they have to insure a car for their exclusive use.

n Check if students' possessions are insured under your home contents policy while they are away at college and come home for vacations.

n Work out your priorities and which risks are already covered before you buy. Otherwise you'll have no money left at all!