Cover the replacement cost of your tools if they get stolen or damaged with tool insurance. A contents insurance policy can cover you when you're not using them for your job.
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The type of insurance cover you need for your tools depends on a few things: whether or not you use them for business, where you use them (at home, away from home; or both) and how much they are worth.
What are my tool insurance options?
You can get tool insurance in one of three different ways:
If you don't use your tools primarily for business purposes, contents insurance can cover your tools up to their full value in the home, in the car and out in the elements, if you add portable contents onto your policy.
If you use your tools for business purposes, personal contents insurance will cover you but only up to a limit (usually around $1,000-$2,000) and only when they are in your home. That means you'll most likely need car insurance for tradies or a form of business insurance called portable contents insurance.
Yep, car insurance can cover your tools! Insurers might offer a policy tailored specifically to tradies that covers your tools in case someone steals them from your car, they're damaged in a car accident or someone takes off with your car, plus all the normal benefits that a car insurance policy offers. Most policies can cover you for up to around $500.
Get tool insurance through your home contents cover
What does tool insurance cover?
Here's a breakdown of what's included in a contents insurance or business insurance policy and what you can add on, which you'll generally need to pay extra for.
- Water damage (escape of liquid)
- Malicious damage
- Accidental damage. Some contents insurance policies will only cover accidental damage if you pay extra for it.
- Specified contents cover. If you have individual tools that are expensive (for example, over $2,000 a pop) then you can add on specified contents insurance. This will increase your cover amount.
- Portable contents cover. Portable contents insurance covers your things when you take them outside the house. So if you travel with your tools, it's a good idea to add this on in case anything happens to them outside.
What do I do if my tools are stolen?
If someone steals your tools from your home or car, there are steps you can take to improve the chances of getting your tools back or of having a successful claim. Here's what you need to do:
Call the police.
This is important because without a police report, you can't claim for theft. Tell the police what was stolen and everything you can remember about when you last saw the tools, as well as anything you noticed when you first realised they were missing. Get a copy of the police report.
Contact your insurer.
Notify your insurer to let them know that you'll be filing a claim. It can let you know what it needs from you to start the claim.
In addition to the police report, you will need to demonstrate that you owned the tools you are claiming were stolen. You can use old receipts or even photos of you with the stolen tools.
Submit your claim.
Your insurer will send you a claim form or you can download one from its website. Fill out the claim form in as much detail as possible and submit it with all your documentation and anything else the insurer requests. It should get back to you within 10 business days accepting or rejecting your claim. If you're unhappy with the results, you can ask the insurer to review your claim and reach out to the Australian Financial Complaints Authority (AFCA).
What doesn’t tool insurance cover?
Each type of tool insurance will have different situations where it won’t cover you – these are called exclusions. Here are some situations where you typically won't be covered:
- Normal wear and tear on your tools. You won’t be covered for normal wear and tear, which includes rust and gradual deterioration.
- Intentional damage. Your insurer will deny your claim if it finds that you intentionally damaged your tools or the damage was the result of you acting recklessly.
- Mechanical faults. Insurance doesn’t typically cover malfunctions. You will need to take this up with the manufacturer.
- Confiscation by authorities such as the police. If your tools are confiscated lawfully, your insurer is not obliged to replace your tools.
- Scratches and dents. These don’t rise to the level of significant damage, so you won’t be covered.
- Tools that are being repaired. Your insurer won’t cover you if a third party damages your tools while repairing them. You’ll have to take that up with the repairer.
Why get insurance for your tools?
If you have a nice collection of tools, it makes sense to insure them for a number of reasons:
- Tools are expensive, especially nice ones that are part of a collection.
- Tools are a prime target for thieves because some can be quite small and easy to conceal.
- It's easy to lose or damage tools when taking them from site to site.
- Tools are an important source of income and enjoyment.
- Rebuilding your tool collection can take time, especially if you don't have the cash.
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