Ask any tradie who’s walked out to their ute on a Monday morning and found the canopy forced open and the tools gone. It takes about five seconds to go from disbelief to doing the mental maths — the drop saw, the nail guns, the cordless kit, the laser level, the hand tools. Ten, twenty, thirty grand. Gone. And the first question after “who do I call” is always the same: “Is this covered?”
For many tradies, the answer is no. Tools and equipment insurance isn’t included in standard public liability. It’s a separate policy, and plenty of tradies don’t have it until the day they need it. This guide explains what tools insurance actually covers, what it costs, and whether it’s worth it for your situation.
What tools and equipment insurance actually covers
A standard portable tools and equipment policy — sometimes called general property or portable valuable items — covers your tools and equipment against:
Theft — the big one. Tools stolen from your vehicle, from a construction site, from your workshop or garage. Theft claims make up the majority of tools insurance payouts. In 2024-2025, tool theft from tradespeople’s vehicles increased sharply across Australian capital cities, particularly in Melbourne and Sydney’s western suburbs. A ute full of tools is a high-value, low-effort target for thieves.
Accidental damage — dropping the laser level off a ladder. Driving over the impact driver you left behind the ute (it happens). A site labourer knocking your drop saw off the bench. Accidental damage cover means you’re not paying out of pocket for your own clumsiness or someone else’s.
Fire and storm — your tools are in a site shed that burns down. Your workshop floods and ruins your stationary equipment. These are less common but more catastrophic when they happen.
Transit cover — your tools are damaged or stolen while you’re moving between sites or between home and site. Some policies explicitly include transit cover; others assume it. Check the wording — if transit isn’t mentioned, ask.
What it doesn’t cover
Wear and tear — tools wearing out from use isn’t insurance. That drill that’s been rattling for three years and finally died isn’t a claim. That’s called buying a new drill.
Mechanical or electrical breakdown — if your drop saw’s motor burns out, that’s a warranty claim against the manufacturer, not an insurance claim. Unless the burnout was caused by an insured event (like a power surge from a storm), it’s on you.
Tools left in plain sight — almost every policy has a condition that tools stolen from a vehicle must have been stored out of sight. If someone smashes your window because they can see a $400 impact driver on the passenger seat, the claim might be denied.
Unattended tools on site overnight — many policies require tools to be removed from site overnight or secured in a locked site shed or container. If you leave your tools on an open site overnight and they’re stolen, cover may be excluded.
Tools used outside Australia — standard policies cover Australia only. If you’re doing a job in NZ, check whether your policy extends.
Hired-in equipment — if you hire a piece of equipment and it’s damaged or stolen, your tools policy might not cover the hire company’s loss. Some policies include hired-in equipment as an optional extension. Check before you hire.
What your tools are actually worth
Most tradies underestimate the replacement value of their kit until they sit down and add it up. Here’s what realistic trade tool kits are worth:
Apprentice or starter kit — basic cordless drill, impact driver, circular saw, hand tools (hammers, chisels, screwdrivers, levels, pliers), basic tool bags. Replacement value: $1,500-$4,000.
Working tradie kit — full cordless range (drill, driver, circular saw, recipro saw, grinder, multi-tool, possibly a radio), 4-6 batteries, a drop saw or table saw, nail guns (framing and finishing), laser level, dust extractor, full hand-tool kit, test equipment (sparkies). Replacement value: $10,000-$25,000.
Specialist kit — everything above plus trade-specific diagnostic or fabrication equipment: drain cameras for plumbers ($5,000-$15,000), thermal imaging cameras and installation testers for electricians ($8,000-$20,000), spindle moulders and panel saws for joiners ($10,000-$40,000). Replacement value: $25,000-$75,000+.
Workshop equipment — stationary machinery (panel saw, thicknesser, jointer, wide-belt sander, dust extraction, spray booth). These are usually insured separately under a business contents policy rather than a portable tools policy. Replacement value: $40,000-$150,000+.
Add it up honestly. Underinsuring means you don’t get enough to replace everything. Overinsuring means you pay for cover you don’t need.
Replacement value vs agreed value vs market value
This choice makes a huge difference when you claim:
Replacement value (new for old) — the insurer pays what it costs to buy a new equivalent tool today. Your five-year-old Makita drill that was stolen is replaced with a new Makita drill of the same spec. This is the best cover and costs more.
Agreed value — you and the insurer agree on a value for each high-value item when you take out the policy. If it’s stolen, you get that agreed amount. Good for specialist equipment that’s hard to value at replacement cost.
Market value (indemnity) — the insurer pays what the tool was worth at the time it was stolen, accounting for age and wear. Your five-year-old drill might be worth $80 on the used market even though a new one costs $350. This is the cheapest cover for a reason — the payout often isn’t enough to actually replace what was lost.
For tools, replacement value is almost always the right call. Tools depreciate fast in insurer valuation tables (often 20% per year), so a market value payout on a five-year-old kit might be 20-30% of what it costs to walk into Total Tools and buy replacements. The premium difference between market value and replacement value on a $15K kit is often only $100-$150/yr.
Tool theft: the numbers that matter
Tool theft from tradie vehicles in Australia has become an organised crime problem. In Victoria alone, the Crime Statistics Agency recorded over 2,000 tool thefts from vehicles in 2024, with the actual number likely higher due to underreporting. The most targeted suburbs are Melbourne’s west and northwest, Sydney’s southwest, and Brisbane’s Logan-Ipswich corridor.
The most commonly stolen items: cordless tool kits (batteries are easily sold), laser levels, nail guns, test equipment, and anything in a Systainer or ToughCase that looks organised and valuable.
The average tool theft claim is $5,000-$8,000 — that’s a mid-range kit. But the real cost is higher when you factor in downtime. A chippy who loses all their cordless gear on a Monday morning might lose three days of work sourcing and buying replacements before they can get back on site. At $500-$800 a day in charge-out rates, that’s another $1,500-$2,400 in lost income on top of the replacement cost.
What it costs
Tools and equipment insurance premiums depend on the sum insured, your trade (electricians and plumbers with expensive diagnostic gear pay more than painters with relatively cheap kits), and the security you have in place.
Based on 2026 market quotes for portable tools cover:
- $5,000 cover: $200-$350/yr
- $10,000 cover: $300-$500/yr
- $25,000 cover: $400-$700/yr
- $50,000 cover: $600-$1,200/yr
Workshop equipment under a business contents policy costs more — expect $500-$2,000/yr for $50K-$150K of machinery, depending on security (alarms, cameras, monitored back-to-base) and location.
You can compare tools cover as part of a tradie insurance quote through BizCover — get a quote. BizPack policies often include tools cover as a component, which can be cheaper than standalone.
For trade-specific tool kit values and insurance costs, see our carpenter insurance guide and electrician insurance guide.
How to reduce your tools premium
List high-value items individually — a $5,000 drain camera listed on the policy might cost an extra $50/yr. If it’s not listed and it’s stolen, it might be subject to a per-item limit (often $1,000-$2,500 on generic policies).
Improve security — some insurers offer discounts for vehicle lockboxes, canopies, tool safes, site security cameras, and GPS trackers on high-value equipment. The discount might be 5-15%.
Increase your excess — a higher excess means lower premiums, but make sure you can afford to pay it if you claim.
Don’t overinsure — be accurate about replacement value. Insuring $50K of tools when you actually have $20K means you’re paying for cover that will never pay out (insurers only pay up to the actual value of what was lost, regardless of the sum insured).
Secure your ute — the most effective thing you can do to protect your tools is also the simplest: park off-street when possible, don’t leave tools in the ute overnight if you can avoid it, use a lockable canopy or toolbox, and consider an alarm or GPS tracker. Insurance is the backstop, not the first line of defence.
Frequently asked questions
Are tools covered if they’re stolen from my ute at the pub on the way home?
It depends. Most policies require you to take reasonable care of your tools. If the ute was locked and the tools were out of sight, the claim should be covered. If the ute was unlocked or tools were visible, coverage is less certain. A pub carpark isn’t inherently excluded, but “reasonable care” is the test.
Does my tools policy cover tools I’ve borrowed from a mate?
Probably not. Most policies cover tools you own or are legally responsible for. Borrowed tools might not fall into either category unless you’ve specifically arranged temporary cover. If you regularly borrow equipment, talk to your insurer about adding hired-in or borrowed equipment cover.
I bought tools on finance. Does the finance company’s insurance cover them?
Some finance agreements include insurance, but you need to check the terms. It might be limited to the outstanding finance amount, not the replacement cost. And the claim process might be controlled by the finance company, not you. Don’t assume finance insurance replaces standalone tools cover — it rarely does.
What’s the difference between portable tools cover and business contents cover?
Portable tools cover is for equipment you take from site to site — it covers theft from vehicles, sites, and in transit. Business contents cover is for equipment that stays at a fixed location — your workshop, factory, or yard. If you have both a workshop and mobile tools, you probably need both policies.
Can I get tools cover if I’ve had a previous theft claim?
Yes, but expect a loading. One theft claim might add 20-40% to your premium. Two theft claims and some insurers will decline. Some will offer cover with a theft exclusion — you’re covered for accidental damage, fire, and storm but not theft. That’s a last resort if your theft history makes you uninsurable for theft.
The information in this guide is general in nature and does not take into account your individual circumstances. Tools and equipment values and premiums vary. Read the Product Disclosure Statement (PDS) before purchasing any insurance product.