Tool Coverage - Is it a good deal?

Most contractors have everything from simple hand tools up to large backhoes or tractors. I am often asked if tool coverage is a good deal. If you primarily use small hand tools (hammer, saw, wrenches, etc) the answer is probably no. All the tool policies I've seen (known as inland marine policies in the the insurance world) have deductibles, coinsurance limits, and pay out actual cash value. In my opinion you are better off setting up a side account and tossing a few dollars in there to build a fund to replace any lost/stolen tools. If you have larger equipment to insure, then an inland marine policy may make sense. Talk to your insurance broker about your options.