The weeks immediately before and after Christmas are the most expensive for holidaymakers to visit sun and snow destinations. Two weeks in the Canaries in a self-catering apartment will cost around £400 per person during the holiday but falls to about £250 per person by mid-January. Upmarket Madeira will set you back £1,000 for a week over the Christmas period while Tunisia will cost £600 a week, though this rate includes half board in a five-star hotel. Ski breaks in the popular Austrian, Swiss, French and Italian resorts will cost even more and do not necessarily always include ski packages or insurance.

Wait just a month, however, and all these prices will drop by as much as a third or more, and tour operators report there is still some availability for mid-January onwards. "There would only be a couple of seats to our most popular Canary Island destinations left," said a Budget Travel spokesman. Panorama Holidays, which also flies to the Canaries, as well as North Africa, and this year to Andorra for ski holidays reports the same huge interest in winter breaks this year. By mid-January the cost of a week's skiing (half board) in Andorra (or in Spain) drops from £550.00 to £359.00 though this does not include skiing equipment which is £140.00 or insurance at £39.00.

The cost of insurance is usually included in most sun and ski package holidays, and while you are not obliged to buy the contract offered by the tour operator you do need to furnish them with an alternative contract that is at least its equal if you want to travel. Ski insurance for between six and 10 days will cost between £40 and £50 in Europe and up to double that amount in North America, adding a significant cost to an already expensive family ski holiday. Families that travel abroad more than once a year, or where adults are also travelling on business should consider buying an annual holiday travel policy. These policies usually cost about £125 for an individual and as little as £175 for a family of two adults and unlimited number of children. Expect another £25 or so if you plan to go skiing.

The AMEV policy allows you to travel up to 180 days, though no single trip must be longer than 30 days duration. Medical cover and personal liability is a minimum of £1 million, personal accident cover amounts to £15,000 and there is a hospital cash benefit of £500 maximum - £20 for every 24 hours spent in hospital. Cancellation and curtailment cover of up to £3,000 is included as is £1,200 worth of lost or stolen baggage cover.

It might also be worth checking to see if your home insurance policy includes annual travel insurance: Royal Sun Alliance is the latest company to include it as an option extra on its new homeplans for about £100, while the Masterpiece home insurance policy from Chubb Insurance includes it automatically. Whatever travel insurance policy you take out or receive as part of a holiday package, you should check that it covers some basic features:

medical and personal liability cover of at least £1 million, but preferably £2 million plus, especially if you are travelling for any length of time in the US;

repatriation costs - by air ambulance or equivalent mode of transport;

a high level of personal accident cover - at least £15,000 to £25,000 - this is a very good idea if you are undertaking any hazardous sport, like skiing;

refund and delay cover - usually up to £3,000;

loss and theft, especially of ski equipment supplied by the operator;

legal expenses of between £5,000 and £25,000.

Virtually every insurance package includes an excess which you must bear before a claim is paid. In the case of most ski holiday insurance policies the excess varies between £15 to £45 per clause. It doesn't sound like much, but a £15 excess on a £30 claim for a lost pair of gloves probably is not worth all the paperwork.

Finally, if you are over age 65 or 70 check with the tour operator about whether you are fully covered by the existing package. Do not be too surprised if you have to pay a premium. Separate travel insurers may decline to cover someone over 80, or insist on premiums up to three times more expensive than that already charged to 65- or 70-year-olds.