Tool Insurance NZ: Cover for Stolen Tools and Equipment
Tool insurance is cover for the tools and portable equipment you use for work, usually written as part of a business insurance package. Home contents policies often limit or exclude business tools, so a theft from your ute or a job site may not be paid under your home policy. A licensed adviser can check your current policies for gaps and talk through tool cover.
In short
- Many home contents policies cap or exclude tools used for work. Check your policy wording before you rely on it.
- Tools stolen from a locked ute, or from someone else's vehicle, are often where claims get tested.
- Tool cover is normally part of a business package, sometimes called portable equipment or general property cover.
- Insurers commonly attach security conditions, such as locked, out of sight and not left overnight in a vehicle.
- Keep serial numbers, receipts and photos now. They are what you will need on the day you claim.
Why Your Home Policy May Not Pay
A working kit adds up fast once you count a compound saw, nail guns, a table saw, batteries and chargers. Home contents policies are written for household goods. Many of them cap tools used for work at a low limit, or exclude them once you earn money from them.
The wording varies by insurer, so we cannot say what yours does. Read the sections on business use, tools of trade and theft from vehicles. Ask in writing if it is unclear. Do this before a loss, not after.
If you have already lost tools, do not assume the answer. Tell your insurer, report the theft to Police, and ask which policy responds and on what terms.
Two other points catch people out:
- Where the tools were. Some contents policies cover items at the home address only, or only for a short list of places away from it. Tools in a mate's ute, or in any vehicle that is not yours, are a common gap.
- Whose property it is. If you work through a company or trust, the company may own the tools. The policy needs to name the right owner.
What Tool Cover Is
Tool cover insures the tools and portable equipment of a business against loss or damage. It sits under names like portable equipment, tools of trade or general property cover, and is usually added to a business package alongside public liability. Our tradie insurance page shows how the pieces fit together.
| Question | What to ask |
|---|---|
| What is insured? | Hand tools, power tools, battery systems, laptops, test gear, safety equipment |
| Where? | On site, in the van or ute, at home, in storage |
| What events? | Theft, fire, accidental damage, sometimes loss in transit |
| What is paid? | Replacement value or market value, and which one applies |
| What conditions? | Locking, out-of-sight and overnight rules, plus the excess |
Tool cover is property cover. It does not pay for injury or damage you cause to others, and it does not replace income while you wait for new tools. For lost earnings, see income protection for tradies. For the wider picture, start at the business insurance guide.
Sum Insured and Replacement Value
Your sum insured is the most the insurer will pay for your tools. Set it too low and a claim can be cut back. Set it by listing what you own and what each item costs to buy new today, not what you paid years ago.
- Ask whether the policy pays replacement value (new for old) or market value (what the item was worth when stolen). On older tools the gap can be large.
- Include batteries, chargers, cases and accessories. They are the first things people forget.
- Update the figure when you buy a new saw or move to a battery platform.
- Check for any single-item limit. Some policies cap each item unless you list it.
For tax, the IRD sets a low-value asset threshold of $1,000 at the time of writing. It has changed before, so confirm the current figure with your accountant. It is a tax rule and has nothing to do with how much your insurer pays.
Theft From Vans, Utes and Sites
Most tool claims are theft claims. The tools are in the vehicle, on the trailer or on a site where several trades come and go. Insurers know this, so conditions are common. These vary by insurer and policy, but you may see:
- Tools must be in a locked vehicle, compartment or container, and there must be forced entry.
- Tools must be out of sight, not on the tray or the back seat.
- Tools must not be left in the vehicle overnight unless it is in a locked garage or a secured yard.
- Site cover may need a lockable gang box or site container.
- Tools at someone else's address, like a mate's ute, may fall outside the policy.
The last point matters. If your tools are in someone else's vehicle, ask whether they are covered before you do it again. The same goes for a business vehicle policy. It insures the vehicle, not necessarily the tools inside it.
If tools are stolen, report it to Police online or on 105, which is the non-emergency number and is open 24/7. Use 111 if it is happening now. Then contact your insurer promptly.
What You Need to Make a Claim
Prepare this now, because the insurer will ask for it:
- A list of every tool with brand, model and serial number.
- Receipts or bank statements for major items.
- Dated photos of the tools, and of how you secure them in the vehicle.
- The Police report and the date, time and place of the theft.
- Proof of forced entry, such as photos of a broken lock or window.
Store the list in the cloud, not in the van. Engrave or mark your tools and note the marks. Your own record of serial numbers and photos is what proves ownership if the tools turn up.
Do You Need It If You Are Self-Employed?
If you work for yourself and your tools are how you earn, yes, it is worth checking. A loss of the full kit can stop you working until it is replaced. A new business should look at tool cover early, and our guide for people starting a business lists what else to sort. Contractors who hold a contract works policy should note that it normally covers the work being built, not your personal tools. Our contractor insurance page explains the split.
If the business depends on you, think about what happens if you are hurt or die. That is what business protection is for.
How a Licensed Adviser Helps
Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931), provides the advice. Our advisers check your current policies for gaps and explain the conditions in plain terms. A Smiths adviser will phone you to talk through which covers to look at. Some business covers we refer to another licensed Financial Advice Provider, and we will tell you who, and how they are paid, before your details go to that firm. There is no cost to talk it through. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy. Cover and price depend on insurer underwriting and the policy wording.
By industry: Electricians, Plumbers, Carpenters, Landscapers and Mechanics.
Frequently Asked Questions
Does home contents insurance cover my tools?
Sometimes, but often with a low limit or an exclusion for tools used for work. Read your policy wording and ask your insurer in writing.
Are tools covered if stolen from my ute?
It depends on the policy. Many require the vehicle to be locked, the tools to be out of sight, and forced entry. Overnight rules are common.
Will tool insurance pay replacement cost?
Some policies pay replacement value and some pay market value. Check which applies to you, especially for older tools.
Do I need serial numbers?
Insurers usually ask for them, along with receipts and photos. Record them before you need to claim.
Is tool cover the same as public liability?
No. Tool cover protects your own equipment. Public liability responds when you injure someone or damage their property.
References
- New Zealand Police: Use 105, non-emergency reporting, including theft.
- Inland Revenue: Claiming depreciation, low-value asset threshold.
Read the full insurance guides
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Ongoing Protection.