The marketing blurb for one company’s landlord insurance policy reads: “3am. Who do they call? Don’t let it be you.”

It’s a scenario familiar to many who own rented properties. And as the buy-to-let market continues to grow, more people are likely to find themselves on the receiving end of unwelcome emergency calls from tenants in the middle of the night.

Lost keys, burst pipes, burglaries; the list of potential problems with which landlords are commonly faced is a lengthy one. Worse still are difficulties that can arise as a result of renting to untrustworthy tenants.

One landlord renting out a property in the south east of England spent months chasing money from a tenant, only for him to disappear, still owing three months’ rent. Without the insurance to cover for such a possibility, the landlord was left significantly out of pocket.

If you are considering renting out a property, the Association of Residential Letting Agents recommends you should discuss buy-to-let, or “landlord”, insurance with a speciality insurer.

Basic buy-to-let insurance provides much of the same cover as buildings and contents insurance for homeowners but offers further options such as emergency assistance and third party liability insurance, covering you, for example, if your tenant slips on a badly maintained staircase.

Although there is no legal requirement for you to purchase landlord insurance, without it you risk being sued for thousands of pounds should any mishap befall your tenant because of your negligence. By buying tailored buy-to-let insurance you could even save yourself money. “Landlords tend to require less contents insurance than other property owners and may over-insure themselves with regular insurance,” says Lee Grandin, managing director of broker Landlord Mortgages.

The good news is that basic landlord policies are similar in cost to regular household policies.

“The excess [on any claim] is often more but typically the rates are the same,” says Tim Larden, marketing manager at Endsleigh Insurance.

Tom Entwistle, editor of advice website Landlordzone, advises contacting a speciality insurer or broker geared up to be flexible.

As with all buildings insurance, it is essential to obtain a rebuild cost from a qualified surveyor first. Your insurance premiums will then be calculated using this cost. Brokers Mortgages for Business estimate that you can expect to pay on average £1.60 for every £1,000 of the rebuild cost for a single rented property. If your property would cost £50,000 to be rebuilt, then your annual landlord insurance premium would be around £800, giving you not just buildings and contents insurance but also third party liability cover and loss of rent cover if the property cannot be occupied due to damage caused by disasters such as fire or flood.

Renting out more than one property could earn you a discount with a policy that covers all the properties together. Sainsbury’s Bank recently launched a policy aimed only at those with rental portfolios which they estimate could save landlords up to £148 in premiums.

Jonathan Moore, head of marketing at Mortgages for Business suggests shopping around because policy options vary so wildly between providers.

According to Paul Adams, director of C&R Insurance Services, the main reasons to obtain landlord insurance are third party liability and loss of rent.

Loss of rent payment insurance, which covers monthly rent for periods the property lies empty following a disaster, is typically capped to a maximum total payout of 20 to 30 per cent of the property’s estimated rebuild cost. This money will be paid out in addition to potential rebuilding costs. This should not be confused with rent guarantee insurance, which is an optional extra designed to cover landlords should tenants walk out or refuse to pay their rent. This additional cover could be around 3 per cent of the rent you charge but would be money well worth paying if you end up with nightmare tenants.

The range of optional extras is varied. Possibilities include legal assistance for eviction of problem tenants and rent disputes and protection against malicious damage inflicted on contents or the property itself.

It is up to the landlord which policy they take, but John Coyne, adviser for the National Landlords’ Association, advises first-time landlords to be fully insured.

The tenants you rent to can make a huge difference to the cost of your policy with some insurers. Certain policies exclude or charge higher premiums for renting to asylum seekers, social security recipients or houses with multiple occupants.

Mortgages for Business calculates that the average charge by most insurers for renting to DSS recipients and asylum seekers jumps to around £3.50 per £1,000 of a property’s rebuild costs, far higher than for more mainstream tenants.

You should also be aware that most policies do not cover for any damage incurred after the property has been unoccupied for a certain amount of time.

Finally, if an accident does occur in your property, Larden suggests checking whether your tenants have their own contents insurance. As a landlord you are not liable for their property, but if you’re lucky they might have a policy that makes them liable for yours.