What is a Termite Bond?

When you began the process of finding a pest control company to inspect or treat for termites, you may have encountered the term “termite bond.” This is an important concept to understand, because not only is it a critical component of your termite protection but it can also tell you a lot about the contractor you’re considering.

What is a termite bond?

Essentially, a termite bond is an insurance policy issued to a homeowner by a termite contractor. It is granted after termite treatment and obligates the contractor to provide either one or two things:

Retreat Bonds

The first obligation is that he or she will re-treat termite infestations that may appear following treatment, at no additional charge. This is called a “retreat bond.” (That’s “re-treat” as in “to treat again,” not “retreat” as in a beach resort in sunny Mexico!)

Damage Repair Bonds

The second type of obligation comes in the form of a “damage repair bond.” It includes the retreat provision, but also obligates the contractor to repair any termite damage that may have occurred since the initial treatment.

There’s something vital to know about damage repair bonds: the provision is only activated by the presence of live termites discovered after a treatment has been performed. It does not address pre-existing damage. If the homeowner uncovers damage after a treatment, but no live termites are observed, it’s assumed that while the treatment killed the infestation, the damage was already done. This is industry standard.

All damage repair bonds have a monetary limit. It can be as low as $1,000 or as high as several million. (Our damage repair bonds are capped at $1 million.) If a claim is triggered, the amount granted for repairs will not exceed the limit of the bond.

A damage repair bond is the preferred option. If it were me, I would be concerned if the contractor didn’t offer one. It may indicate they either have low insurance limits for liability, or they don’t perform thorough treatments.

How does a termite bond work?

Contractors establish a bond on a structure at the time of treatment. In general, the first year bond is included in the initial treatment. Upon the anniversary of the procedure, customers may elect to extend the bond for another year. Typically this involves a renewal fee, and should also include an inspection of the structure by the bonding company.

Bonds are designed to expire after a fixed period, based on the efficacy of the termiticide used. Generally, it ranges from five to ten years. There are no termiticides available that will not break down over a ten year period.

When a bond expires, another treatment is required and a new bond is issued. The terms of the bond may remain unchanged, or new provisions may be added.

While there is no law requiring an active termite bond to sell a home in Florida, there are a few compelling reasons to have one. A termite bond adds value to your home, provides peace of mind to the buyer and seller, and may encourage lenders to offer better financing.

A termite bond adds value to your home by preventing expenses that arise as a consequence of the fiendish little beasts.

In the case of a retreat bond, the homeowner or buyer won’t have to spend heaps of cash to stop a termite infestation.

If damage repair is included, costly repairs are undertaken by the contractor–at little or no expense to the homeowner. In either case, both buyer and seller gain peace of mind.

In the not-too-distant past, lending institutions often required homes to have a termite bond in place before loan approval. (This is what caused many people to erroneously assume that a bond is required to sell a home.) While less common today, most banks will still consider it a plus if a home has a termite bond included with the sale. This is especially true if the bond includes damage repair coverage.

If you live in Volusia or Flagler County in Florida and have questions about termite bonds, contact Universal Pest Control. (It doesn’t have to be our bond–just happy to help!) We can be reached online at BugandTermiteControl.com or by calling 386-673-1557.