Termite Bonds: What Costs Do They Cover?

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In certain parts of the United States, buying a home with no termite bond or termite contract is almost unheard of. As the locals in Georgia and other southeastern states, it’s not a matter of ‘is the house infested by termites?’, but rather one of ‘when will the termites strike next?’ If you’re lucky enough as to never having had to deal with termites, you should know that they are the single most damaging house pest—more damaging and costly even, throughout the States, than house fires and other risks. That’s because termites are difficult to detect, small and silent, highly resilient, and able to feed on a substance that no other insect digests—wood pulp, or cellulose.

In Georgia, most lenders won’t even grant mortgages for homes that are not protected by termite bonds. And while such contracts are in no way mandated by any local laws, they are highly advisable to have, as most realtors will tell their clients. It’s interesting to note that insurance companies decline any responsibility in covering termite damage costs. Meanwhile, sellers need to include the existence of a termite bond in their disclosure, as well as if that bond can be transferred to the new owner. Essentially, the growing necessity for termite bonds continues to fuel the extermination service industry. And while it’s true that termite bonds do run a certain cost each year, but their price is surely far below having to deal with termite treatment cost on an ongoing basis.

So what will a termite bond pay for? This greatly depends on where you live, how old your house is, and whether or not it has been previously affected by termites. However, by and large, this is what most providers will offer:

  • A contract between the owner of the home and an exterminator, which guarantees that the exterminator will cover the costs of any termite re-infestation throughout the duration of the bond.
  • An initial inspection of the home, to ensure it is free of termites. Interestingly, many potential home buyers are turned down by exterminators, who refuse to grant them complete bonds (i.e. bonds that also cover repair costs), claiming the home cannot be thoroughly inspected. This usually happens with older properties, whose wooden structural elements are covered up and cannot be inspected.
  • Yearly inspections, for each year that the bond is active.
  • In some cases, termite bonds will also include cost coverage for the damage caused by termites. This means that a home which has been inspected of and treated for termites by the service provider will have all the damages paid for by the exterminator, in the event of a reoccurrence.

Whether or not your home requires a termite bond is entirely up to you, but it’s worth bearing in mind that colony queens can live well over two decades, as well as that termites feed throughout the day, with no pause. Consider paying for that type of damage and then ask yourself if protection would not be a more affordable solution.

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