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You can insure your tools so they're protected wherever you use them, but the type of cover you need 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 both individually and as a collection.
Read on to find out the right way to protect your trusty tools.
Compare insurance that protects your tools
How can I cover my tools?
The major factor that determines how you go about getting cover is whether or not you use your tools for business. We look at both of these scenarios in the following sections.
If you don't use your tools for business purposes
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.
Here's how to get cover:
- Take out a contents insurance policy. If you don't already have one, take out a contents insurance policy and protect your collection of tools for whatever it's worth. This type of cover applies only to tools that stay put in your home, like in a garage.
- If they’re really expensive tools consider specified contents insurance. If you have individual tools that are super expensive (think over $2,000 a pop) then you can still get them covered! All you have to do is let your insurer know that you want to take out specified contents insurance. You’ll let it know how much each expensive tool is worth and it will adjust your premiums accordingly.
- If you’re taking them out and about just add portable contents insurance. 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 in the yard or the car park. Not all insurers will cover tools under their portable contents policies, so make sure you find one that does.
| Company | Cover Limit |
|---|---|
|
$2,000 |
|
$2,000 |
|
$1,000 – $2,000 |
|
$1,000 per item up to $5,000 |
If you use your tools for business purposes
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. Here are the best options for you:
Car 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.
| Tools of trade | Limit | |
|---|---|---|
|
|
Gold Comprehensive: Up to $500 Standard Comprehensive: Up to $250 |
|
|
No limit stated |
|
|
Price Promise: $250 Price Saver: $500 |
|
|
Up to $200 per item |
|
|
Up to $3,000 for any one incident |
Portable equipment cover
This is a form of business insurance that protects your tools most places you take them, including on the job site (even if you're a sole trader). It covers you for:
- Theft. You should be covered if someone steals your tools.
- Damage. You should also be covered for accidental damages that happen to your tools.
Tradies such as electricians, builders and plumbers can expect to pay around $32–$64 a month for cover*.
Work in a different field? Find out how much you’d pay here
What does tool insurance cover?
Tool insurance will repair or replace your tools in the following situations:
- Someone steals them.
- They are damaged or destroyed in an event like a fire, storm or flood.
You can be covered in your home, car or on the job site but this depends on which kind of cover you have chosen from the options above.
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.
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. It’s good notify your insurer that you’ll be filing a claim and it can let you know what it needs from you to start the claim.
- Gather documentation. 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.
- Wait. Your insurer should get back to you within 10 business days with the results of your claim. If you are unhappy with the results, you can appeal and the insurer will review your claim. If you are still unhappy, you can appeal to the Australian Financial Complaints Authority (AFCA)
What doesn’t tool insurance cover?
Each type of tool insurance will have different situations it won’t cover and these are called exclusions. For example, general contents insurance won’t cover your tools when they are outside of the home. However, all of these types of insurance have some similar exclusions in common.
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.
Picture: Unsplash
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