Keep reading, in this article, I’ll be discussing termite insurance, coverage plans, and bonds.
Termites cause about 5 billion dollars in property damage yearly. If you live in a city at a high risk of termite infestation, then you should put sound termite prevention strategies in place, and you should also inquire about termite insurance.
Many home insurance plans do not cater to termite damage. What’s worse is that many house owners are under the impression that insurance plans do.
Many people believe that similar to home damage from natural disasters, structural termite damage is also covered in the home insurance plan.
You would be heartbroken if you found out that your house insurance does not cover termite related damage after the pests must have destroyed thousands of dollars worth of infrastructure.
Many insurance plans consider pest related issues preventable by good home maintenance and due to that, do not cover these types of damages.
Almost all home insurers only cover what they perceive to be accidental damage and sadly, termite damage does not fall within the bracket of an accident.
What you can do is look around for insurance policies that cover “wood-destroying insect damage.” These are the exceptions, but not the rule, however, they do exist. And they usually cover all wood-destroying insects, including termites and carpenter ants.
Collateral Damage Caused By Termites
Another clause in some insurance policies that could cover termite-caused damage is those policies that deem certain instances of termite damage as “collateral damage”.
An example of this could be if an infested support beam breaks away, and causes a part of the roof to cave in and damage the floor and walls of the lower floors on the way down. Some insurances will consider the damaged walls, floor, and roof collateral damage since they were caused by accident.
However, they will most likely not cover the cost of the infested support beam, being that it was infested by termites, un-accidentally.
Are There Alternatives If Insurance Does Not Cover Termite Damage?
Not finding a suitable home insurance plan that covers termite damage doesn’t mean you should ignore the chances of termite infestation.
There are other options you can explore, and these include a termite bond.
If you live in an area where there is a high occurrence of termites, or you have neighbors who have experienced termite problems, then you should consider getting a termite bond.
Many states have licensing programs for termite exterminators, so you can find about three who are licensed and get in touch with them to see what kind of plans they can offer you.
Many termite control professionals have different plans. An example is Terminix.
Some of these plans include termite inspection, as well as various guarantees against termite damage.
A termite bond plan is one of such plans. The homeowner reaches an agreement with a professional pest control service to visit, inspect, and treat their house at intervals.
These visits and treatments will be at least once a year, it could also be quarterly or every six months. This all depends on the agreement you reach with the pest control service as well as the risk of termite infestation in the city you live in.
If the pest control service who you have entered a bond agreement with detects any termites around your house, then they will agree to treat and disinfest the property, as well as pay for any damage the termites may have caused.
Be sure that you fully understand the details of the termite bond agreement. Some do not cover damage caused by certain species of termites. Go through each detail carefully and understand what you’re getting into before you sign the agreement.
Many homeowners have been caught off guard, thanks to their neglect of a termite bond, which would have spared them the trouble and cost of termite damage in the first place.
As you can see, there are a few options for you to explore, even if your homeowners’ insurance does not cover termite damage.
Also keep in mind that if you sustain significant damage to your structure due to termite infestation, you can call on an attorney to see if the particular damage falls under the collateral damage clause in your home insurance policy.
What About New Homes? Are They Covered Against Termite Damage?
When new homes are built, it is expected they are built with high-quality materials.
These pre-treatment steps are generally called pre-construction termite treatment.
Termite Bonds And Protection Plans
Termites are responsible for about $2.5 billion worth of property damage to American houses each year, and a lot more globally.
Though homeowners fight back with a wide range of termiticides (pesticides that kill termites) there are valid reasons why termites are some of the most successful insects on Earth. Like humans, they are opportunists.
When one termite colony has been wiped off, this not only causes the homeowner to heave a sigh of relief but can also be good news for other termites looking for a place to start a new colony.
This is why a homeowner may have more than one experience with wood-eating termites. To help reduce the costs of extermination, many homeowners opt to acquire termite bonds.
A termite bond is an agreement or policy that a homeowner enters with an exterminating company. It also can be a type of “termite insurance”, where your exterminators pay for any damages caused by termite infestation after the home has been treated with termiticide.
Just like with other forms of contracts, termite bonds vary in cost and what they provide, depending on which pest management service you are engaged with.
There are two major kinds of termite bonds:
Let’s say XXX Company successfully treated your home for termites. However, two years later, another termite colony has invaded your home. If you have a treatment bond with XXX Company, then your home will get another treatment for free.
Usually, with treatment bonds, you will be required to pay for termite damages.
This kind of bond will require the company to pay for damages caused by termites. If you live in an area at a high risk of termites, then this type of bond is the safest for homeowners to get.
Termite bonds usually cover only certain types of termites and not all of the thousands of termite species known to exist on Earth.
The most damaging types are subterranean termites, but bonds can also cover drywood termites, dampwood termites, conehead termites, and/or Formosan termites.
Only pay for the types of termites you are sure lives in your city or state.
For example, there’s no sense in paying for protection against damp wood termites if you live in the desert, as there is no dampwood there.
What if the Company Goes Out of Business?
At a time in America, there was a successful chain of exterminator companies (name withheld).
The company suddenly went out of business. Thousands of homeowners suddenly realized that the termite bonds they paid for were now worthless. Chances are you know someone who was in this scenario from decades ago.
It is usually a good idea to get a termite bond from a trusted company that has been around for many years. If a pest management service goes bankrupt, then your bond will most likely become void.
Don’t assume that another exterminator will hold up the terms of your termite bond made with your original exterminator.
Exterminators know that homeowners want to avoid getting into a financial tussle of holding a worthless bond. Sensible exterminators will already have deals with other pest control companies to transfer their customer’s termite bonds in a case of bankruptcy.
This way, the customers are guaranteed that they get what they paid for.
Homes with termite bonds that can be transferred to a new homeowner make that home a lot more attractive. If you have plans of selling your house, ask your exterminator if the bond can be transferred to a new owner.
If you plan on buying a home soon, ask the seller if the home includes a transferrable termite bond.
Let’s assume that you live in a neighborhood or state known for termite infestations. States along the Pacific Northwest and the Deep South are most vulnerable to infestations.
If you want to sell your home, then a termite bond provides you more integrity. If you want to buy a home and it does not have a termite bond, then you may want to look for another home to buy. There may be a termite infestation the owner is trying to hide.
A termite infestation isn’t something homeowners wish for, but if you live in an area that puts your house at risk of infestation, then you should seek out insurances or termite bonds to spare you the heartache.
I hope this article on termite insurance, coverage plans, and bonds has been helpful.