The best way to cover your tools will depend on how you use them. Either way, you’ll typically be covered for theft or damage of your tools.
If you use your tools for personal use
If you use your tools for hobbies or home repair, and aren’t paid for projects you use your tools on, you can get coverage through your homeowners or renters insurance.
Insurance for inexpensive tools. Your homeowners or renters insurance likely already covers your tools if they’re stolen or damaged in certain covered events. But most policies have a per-item limit, so tools over $1,000 may need additional coverage. And it likely won’t cover losing your tools or accidentally breaking them.
Insurance for expensive tools. If you have pricey power tools that cost more than your policy’s limit, you can get valuable personal property insurance, also known as scheduled property insurance, to cover them. You’ll be able to add extra coverage for each individual tool at full value to your homeowners or renters insurance, and these policies often cover tools that are broken or lost as well as stolen.
If you use your tools for business purposes
If you use your tools for business purposes, they might be excluded from coverage in your homeowners or renters policy — you’ll need to talk with your insurer to find out for sure.
If that’s the case, you can protect them with contractors equipment insurance. This is a form of business insurance that protects your tools most places you take them, including on the job site. 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.
Damage to rented or leased tools. Some policies will also cover tools that you rent or lease.
Compare homeowners insurance to protects your tools
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:
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 realized they were missing. Get a copy of the police report.
Contact your insurer. Notify your insurer of the theft as soon as possible.
Gather documentation. In addition to the police report, you’ll need to demonstrate that you owned the tools that 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 usually submit a claim online. Fill out the claim form in as much detail as possible and submit it with all your documentation and anything else the insurer requests.
Replace your tools. In most cases, your insurer will send you a check to cover the cost of repairing or replacing the tools. If your claim is denied or you feel like the amount you were given won’t cover the cost, you can appeal and the insurer will review your claim. If you are still unhappy, you can appeal to your state’s insurance department.
What’s not covered by tool insurance?
Exclusions vary based on your insurer and policy type, but you generally won’t be covered for:
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’ll need to take that up with the manufacturer.
Confiscation by the police. If your tools are confiscated lawfully, your insurer is not obligated 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 may not cover you if a third party damages your tools while repairing them.
If you have under $1,000 worth of tools that you use for home projects and hobbies, you may already be covered by your homeowners insurance — but you should check with your insurer to find out exactly what you’re covered for. If you have pricey tools that you want additional coverage for, compare home insurers with valuable personal property coverage if you use your tools for personal reasons, or take out contractors equipment insurance if you use your tools for business.
Frequently asked questions about tool coverage
Generally no, most insurers won’t cover tools you use as part of your business. But if you work out of your garage and just occasionally make money off your hobby, it’s worth talking to your insurer to find out how that affects your coverage.
Yes, policies can cover both small hand tools and heavy machinery. But exactly what’s covered will vary from policy to policy, so it’s a good idea to talk with your insurer about what tools you use before purchasing a policy.
Check the policy documents you received when you first signed up for information on your coverage limits for specific items. If you can’t find the information you’re looking for, or you don’t have a copy of your policy, contact your insurer.
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