A termite bond is very similar to an insurance policy. When a termite control company treats your home, it provides you the assurance that termites will not re-infest your home for a given period of time (usually a year). In addition, most reputable companies will offer a damage warranty that promises the homeowner that any new termite damage created after the initial treatment will be repaired at the termite control company’s expense.
When the termite bond is near expiration, the issuing company will usually perform a termite inspection and offer you the option to extend the warranty with what’s called a renewal fee. Averaging between $125 – $300 per year, this fee is usually a fraction of the cost of the original treatment. Many homeowners elect to extend this termite bond citing the peace of mind it provides.
The Pro Stance
Cautious consumers cite that termite damage is the most likely source of damage their home will encounter. In fact, according to the Georgia Department of Agriculture, termite damage and control measures account for $1-3 billion annually – that’s more than fire, flood, and wind damage combined. More than likely, these homeowners are aware of the extreme situations in which termite damage exceeds well over $50,000 in repair bills. They ask, “Why wouldn’t you protect your home from its most likely threat?
Many termite warranty advocates also point to the fact that, in some cases, termite damage can be extremely difficult to find. Even when termite inspections are performed flawlessly, it’s not uncommon for active termite infestations to manifest for years (even decades) before being found. In “Everytown, U.S.A.”, you’ll find homeowners that were given a passing grade on their termite inspection, only to find extensive damage weeks later while doing some type of remodeling work.
The Opposition
With a few notable exceptions, termite damage occurs very slowly. Furthermore, it’s quite rare for a structure or wall to completely collapse from termite damage without giving indicators well ahead of time. In most cases, termite damage is identified and addressed before major structural damage has occurred. In fact, industry insiders estimate the average termite damage repair claim to cost termite control companies between $1,500 – $3,000.
Homeowners that challenge the idea of paying an annual renewal fee cite the relatively low average cost of repairs. They base their logic on basic math, stating that ten years worth of renewal fees will essentially pay for the cost of termite damage repair. As opposed to paying a renewal fee, why not set the money aside in an emergency fund that can draw interest? These are usually the consumers that select high deductible amounts on their auto insurance, thus saving a considerable amount of money in the long run. The difference, of course, is that termite bonds don’t offer the same flexibilities in deductibles and/or scaled-down coverage as auto insurance.
Other detractors of termite bonds may have had a bad experience with a termite control company. Perhaps they’ve had termite damage while under bond, yet had difficulty getting the repairs completed in a timely manner. Others may have fallen victim to a “loophole” in the termite control company’s contract and/or had to take legal action.
Conclusion
To determine whether or not to maintain a termite bond should, you should consider three factors:
1. Your personality traits- Are you a risk taker or conservative? Some people don’t consider themselves risk takers, but are willing to take “calculated risks” if the odds are greatly in their favor. Of course, the remaining two factors play a huge role in the amount of risk involved
2. Your geographic location- Although termites can be found in all 50 states, the residents of southern states stand a much greater risk of termite infestation than residents of extreme northern states such as Maine or North Dakota.
3. Your financial health– This might sound strange, but the worse your financial situation, the more important it is for you to maintain a termite bond.
What if you can’t afford the $150-$300? Three words- Budget it in. If you can’t afford a few hundred dollars, how could you possibly afford to replace a wall, door, window, and part of your sub-floor?
What if you have a significant emergency fund set aside? Chances are, you’re financially responsible and make rational decisions. After presented with all the facts, you’ll know what’s best for you.
Final Words
Regardless of your decision, it’s extremely important to have your home inspected for termites on an annual basis. Most termite control companies offer the service complimentary. Although the inspection is no guarantee your home is termite free, it’s certainly worthwhile.
For more information on termite warranties, visit this article: Termite Warranties Explained.
