Landlords are being warned to check their insurance policy covers tenants failing to pay their rent as the credit crunch bites.

The financial effect for landlords can be disastrous if their tenant falls into arrears, according to leading insurer Axa.

Axa''s stark warning comes after news that during the first four months of 2008 Bradford & Bingley (B&B) saw a 52 per cent increase in the number of buy-to-let landlords in arrears.

The former building society announced earlier this week its profits plunged by £116 million in the same period compared with last year''s figures, earlier this week.

Michael Keating, Axa''s general manager of personal lines intermediary, said: "While this is clearly not going to help all landlords who might be struggling, having the right cover in place might just ultimately save an unwanted repossession for some."

"And in the current market it would, if nothing else, certainly provide some much needed peace of mind," he added.

B&B''s profit warning of an £8 million pre-tax loss caused its share price to fall by 30 per cent on Monday, according to Google.