Many landlords have no idea of the level of their property insurance, and many would be shocked to discover they are seriously underinsured.

Alistair Steward, risk solutions director at Cunningham Lindsey, which offers a calculation service for British Insurers Brokers' Association members, says:  "Underinsurance applies to over 80% of the properties we value, with an average amount of underinsurance on commercial buildings around £150,000."

Depressed property prices are unlikely to rectify matters, because although property prices have been, repair, renovation and rebuilding costs have continued to rise.

The cost of rebuilding a property will not be the same as the market value. Surveyors and insurers have some rules of thumb to help you work out what your property is actually worth - to be absolutely sure you should get a surveyor’s report.

If you are buying a property to let, the lender’s valuation report will also contain a rebuilding cost figure.

To work out your rebuilding cost, you should know the dimensions of the building and hence its floor area.

Remember, if you should have to call on your insurance and your cover is for only part of the value of the property, your insurer will only cover that proportion of your loss. This means failure to insure for a sufficient amount could result in expensive loss should a claim arise. This is especially so taking into account the hidden costs of rebuilding which would otherwise be covered in full by insurance, including:

• site clearance costs;
• survey costs;
• architects’ fees;
• rebuilding the property to its original state; and
• compliance with government and local authority requirements.

Ensuring you have the right amount of landlord insurance may increase your premium, but you will find that money goes a lot further if the building goes up in smoke.

In fact, as the UK moves into recession, adequate insurance safeguards for a whole range of risks are essential for all landlords, however experienced.

Insurance protection for landlords falls into four specific areas:

• building and or contents insurance which protects the physical building and contents owned by the landlord;
• legal expenses covering legal costs incurred by landlords should a tenant damages a rental property or refuse to leave;
• rental protection, which guarantees the rent should the tenant default; and
• emergency home assistance, providing cover for emergency call outs to a let property.

Unlike home building insurance, landlords’ buildings insurance cover properties let out for residential use and is usually a requirement of any buy to let mortgage.

Landlords’ contents insurance provides covers those items owned by the landlord and available for tenants’ domestic use. This may include a refrigerator, furniture, television and washing machine.

Legal expenses insurance for landlords provides access to legal expertise and cover for the cost of legal action including eviction of tenants, recovery of rent arrears and recovering the costs associated with malicious damage, or neglect by tenant. Even the best tenants can have difficulties or accidents that can result in property damage and lost rent.

Landlord rent guarantee insurance provides protection should a tenant fail to pay the rent. This is particularly important as more and more landlords rely on rental income for their own salary, and tenants increasingly face the possibility of redundancy.

Emergency insurance provides great value and solutions to everyday problems that can easily blight any landlord’s life. Emergency repairs to electrical systems, heating or hot water supply, plumbing and drainage problems, security and glazing - up to the policy limit. Best of all landlords’ emergency home assistance cover provides 24/7 protection for your property and tenant.

In uncertain economic times, landlords have it in their own hands to make sure that at least those uncertainties which can be covered by insurance will not add additional and perhaps critical headaches.