Quality tools are expensive but a very necessary investment for any handyman. Without the right tool, it is often difficult to complete even the most basic jobs successfully. It can take a handyman years to build up a set of tools and equipment that is suitable for performing a wide range of jobs.
However, just like most equipment, tools can break, get damaged, lost, or stolen. It can be a very costly exercise to keep replacing tools on an ongoing basis or once-off for any handyman. Even if it is only one tool every few weeks that needs to be replaced, the expense eats away at profits.
Handyman insurance provides cover for a variety of different risks that handymen face, including tool or equipment insurance:
What Is Tool Insurance?
Tool insurance provides cover to replace tools that have been damaged, broken, or stolen. These tools can include handheld tools, power tools, non-power tools, and equipment. A comprehensive insurance policy will also provide cover for the replacement of lease or hire equipment and tools.
What Incidents Are Covered By Tool Insurance?
This cover is normally paid out in the event of fire, flood, and theft but may also cover other accidental breakages such as a tool that breaks while being used. The cover may also be restricted by location. For example, an insurance policy may provide cover for incidents that occur on the job and/or while tools are in storage or kept at home.
A quality insurance policy will also provide cover while the tools and equipment are being transported or while in transit. This is an important aspect of tool insurance for a handyman as the nature of their job means that they travel from one job to another constantly putting them at a higher risk of being in a car accident.
Insurance policies that make provision for tools in transit are commonly covered for incidents such as vehicle accidents, hijacking as well as fire and flood. This is also an important option for the handyman who permanently keeps their tools in their truck or van.
It is important to research different types of insurance policies to find out what type of incidents or events will be covered.
What Isn’t Covered By Tool Insurance?
Insurance companies are not going to cover the general wear on your tools that eventually result in breakage or the need for replacement. They also aren’t going to cover the cost of replacement for a tool that was deliberately damaged. Some insurance policies will include a clause that cover won’t be provided if a tool was damaged due to incorrect use.
Tools that have a manufacturing fault will also not be covered as these should be covered by a manufacturer’s guarantee. The loss of tools due to confiscation from a law enforcement officer will also not be covered. If the tools are used by another person when they are damaged, a claim will not be paid.
How Much Cover Does A Handyman Need For Tool Insurance?
Tools may be covered for the full replacement value of the item/s that have been damaged or stolen. This allows for the purchase of new tools to replace the ones that were damaged or lost due to theft or another type of eventuality.
However, most insurance policies place a limit on the maximum amount that will be paid out per claim. The policyholder will choose an amount of cover that will best suit their requirements and their budget. Cover commonly ranges from $1,000 to $10,000. The higher the chosen limit, the more the tool insurance will cost.
It is recommended to evaluate your needs as well as the individual risk of needing to replace tools to determine the ideal amount of cover. The value of the tools in the kit should also be taken into account. If the value of the tools is less than $5,000, it is not recommended to take out insurance to provide cover for more than this amount. Remember to consider the replacement value of the tools and not what they originally cost. In other words, what it would cost to replace all current tools with new tools.
For handymen that use more expensive equipment, an equipment policy may be preferable as they provide options for higher amounts of cover.
Does Tool Insurance Have A Deductible?
Tool insurance does not commonly require a deductible to be paid when claiming. A deductible is an amount that the policyholder must pay to the insurance provider before they will payout. This deductible is put in place to prevent policyholders from claiming unnecessarily. The deductible is normally calculated as a percentage of a claim. So if the claim is for $10,000 and the deductible is 10%, the policyholder will need to pay $1,000 before the insurance provider will provide the insured amount of $10,000.
Read the terms and conditions of the policy carefully or ask the insurance provider if there is a deductible for claims. If there is a deductible, it is recommended to only claim when necessary and for larger amounts. Insurance is aimed at providing cover when you need to pay for expenses that you cannot cover out of pocket.
Tool Insurance And Premium Increases
Insurance providers increase their rate or premium on an annual basis. This increase can take place at the beginning of each year or on the anniversary of the inception of the policy. In other words, every year on the same date as to when the policy was first activated.
However, increases may also be implemented every time a claim is paid out. Once again, this is meant to prevent unnecessary claims. Claiming only when necessary will keep the cost of tool insurance down.
What Does Tool Insurance Cost?
Many factors are taken into consideration when calculating the rate or premium that will be paid for tool insurance. First and foremost, different carriers have different evaluating criteria and therefore rates that they charge for cover. It is important to compare quotes from different providers to get the best deal.
When comparing quotes, don’t simply look at the cost but also at the value of a specific tool insurance product. For example, one carrier may be slightly more costly but provide cover for tools in transit or provide higher amounts of cover.
The second most important factor that affects cost is the amount of cover selected. The higher the amount of cover, the more the policy is going to cost.
It is recommended to opt for tradesman or handyman insurance which includes cover for tools and equipment. This will provide greater value as it offers additional benefits such as liability insurance, loss of income, and so on. Although the cost for these comprehensive policies will be greater, the value that they provide makes them a better option than only taking out tool insurance.
Where To Find Tool Insurance?
Several insurance carriers provide tools and other insurance covers for tradesmen such as a handyman. Online insurance comparison platforms are a good place to start looking for this type of insurance. Alternatively, most carriers will provide instant online quotes. The old-fashioned method of calling different insurance carriers and requesting quotes will also work but will take more time and effort.
The best advice is to contact an insurance broker that specializes in offering a range of different insurance products to tradesmen. A broker will assist in evaluating individual needs, risks, and other requirements to identify the most suitable insurance product.