A termite bond is an agreement between the termite control company and you the homeowner. It assures that if termites re-infest your home within a given period of time (usually a year) the company will retreat your home at no additional charge.
In addition, most companies 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. This fee is usually 20-25% of the cost of the original treatment or $175-$250 per year. Many homeowners elect to extend this termite bond citing the peace of mind it provides.
Folks that see the value of a termite bond understand that termite damage is the most likely source of damage their home will ever 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. These homeowners have heard the “horror stories”. They’re aware of those rare cases where termite damage exceeded over $50,000 in repair bills.
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.
Just about every town has 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.
With a few notable exceptions, termite damage occurs very slowly. In addition, it’s pretty rare for a structure or wall to completely collapse from termite damage without giving indicators well ahead of time. Termite damage is usually identified and addressed before major structural damage has occurred. In fact, industry insiders estimate the average termite damage repair claim to only cost between $1,500 – $3,000.
Non-believers cite the low average cost of repairs. They base their logic on simple math. They calculate that ten years worth of renewal fees will essentially pay for the cost of termite damage repair. Instead of paying a renewal fee, they choose allocate funds to an emergency fund that can draw interest. After all, there’s no guarantee termites will return. These are the same types of consumers that select high deductibles on their auto insurance because it saves money in the long run.
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.
To determine whether or not to maintain a termite bond, 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.
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? You should really find a way to budget it in. If you can’t afford a few hundred dollars, It’s not likely you can afford to replace a wall, door, window, and part of your sub-floor.
What if you have an emergency fund set aside?You’re more than likely a financially responsible person. After presented with all the facts, you’ll know what’s best for you.
Regardless of your decision, be sure to have your home inspected for termites on an annual basis. Here’s the good news: most termite control companies offer the service complimentary. And while the inspection is no guarantee, it’s certainly worthwhile.