Is Termite insurance really needed?

[subiegirl]

Hi there,

I live in North Carolina and I know we have termites here, but was wondering, is termite insurance really needed or do most of you self-insure for termites? We have the insurance currently but as it is an increasing cost, I am reassessing the need.

Thanks!

[uniwelder]

I'm in a neighboring state and hadn't realized people buy termite insurance.  What is it exactly?  Is it a monthly/quarterly pest treatment that you prepay for?  And if you somehow end up with termites, the company pays for all mitigation and wood repair?

[subiegirl]

Exactly that. The pest control company comes and inspects the property, puts some granulars around to “treat” around the perimeter of the house and the termite bond that is issued covers remediation in case you have termites up to a certain amount. The current bond is $500k worth of coverage. On new homes, many times the builder puts in a barrier that is supposed to help keep termites away for a few years so the insurance is really just in case termites get through. After that, the pest control company puts in bait traps and fills them every 6 months or so. The cost starts at around $200 a year for the first few years to over $1k to install the bait stations and $300 and increasing annually afterwards to keep the insurance. Our home was built 2 years ago so we have only paid 1 year of insurance but knowing how expensive it gets, I am trying to really get an idea of whether it is needed.

[uniwelder]

Interesting. I don’t have any input, as I’ve never had termites, but am curious to hear what others say.

[Tigerpine]

I never bought a house when I lived in South Carolina, but I knew that termite insurance was quite common.

[MrGreen]

Termites can do serious damage in a very short amount of time. That said, they have to be able to get to the wood on your house. Termites cannot survive in the light so they will build mud tubes up the side of a foundation to access the wood in your home. If you have a crawlspace, it's easier for them to access wood because they have a dark opening they can traverse with no impediments. If your house is a slab, they'll need to build mud tubes to reach the sill plates of your house. If you know what to look for and are diligent, it's pretty straightforward to keep them away from your home. General recommendations are to not pile wood or any other product that is an attractive food source next to your home.

We live in coastal North Carolina where termites are prevalent. Two years ago we purchased a new construction home. We visited it during construction multiple times. One time we were clearing scrap garbage away from the building envelope and when I picked up a big piece of scrap wood an entire colony of termites started scrambling for cover. We live in a home on a slab and I do not insure for termites. I know what to look for around the perimeter of our home. My dad's house was on a crawl space in downtown Wilmington and when we bought it there was evidence of a past termite infestation in the foundational support joists. If I had a crawl space I would probably have a pest company do treatments since you're not going to regularly go down there to ensure termites aren't coming up from the ground inside the crawlspace walls. I don't know that I'd bother with termite insurance, but I would treat for them.

[subiegirl]

That is extremely helpful. We are on a slab, and we don’t have anything “yummy” for termites near the house with the exception of mulch in the flowerbed that is in front of the house. We have been talking about changing that out to rock. Maybe we can do some research on what to look for in addition to what pest control inspectors have mentioned and self insure?

[GilesMM]

Shop around for a better deal.

[subiegirl]

I have called about 12 different companies including the big guys, but they all want to install the bait stations and that along with the bond starts at $1,200-$1,500. After the bait stations are installed, paying for the bond annually is $300-$400 the first year and goes up annually. It feels like a huge cost, hence trying to see if we really need it!

I have also seen that we can install and maintain our own bait stations but there is no insurance. I don’t know anyone who has done that though.

[GilesMM]

I have called about 12 different companies including the big guys, but they all want to install the bait stations and that along with the bond starts at $1,200-$1,500. After the bait stations are installed, paying for the bond annually is $300-$400 the first year and goes up annually. It feels like a huge cost, hence trying to see if we really need it!

I have also seen that we can install and maintain our own bait stations but there is no insurance. I don’t know anyone who has done that though.

If you have that many quotes, then that is the real cost of the insurance which must reflect the risk and cost of repairs these days.  Sort like home insurance prices - they are skyrocketing to reflect real risk and cost but that doesn't mean "it isn't worth it".

[uniwelder]

I have called about 12 different companies including the big guys, but they all want to install the bait stations and that along with the bond starts at $1,200-$1,500. After the bait stations are installed, paying for the bond annually is $300-$400 the first year and goes up annually. It feels like a huge cost, hence trying to see if we really need it!

I have also seen that we can install and maintain our own bait stations but there is no insurance. I don’t know anyone who has done that though.

If you have that many quotes, then that is the real cost of the insurance which must reflect the risk and cost of repairs these days.  Sort like home insurance prices - they are skyrocketing to reflect real risk and cost but that doesn't mean "it isn't worth it".

I'm wondering about that, as someone who has never heard of termite insurance before.  Maybe the price is only high because this is such a small niche market and everyone in that little market just price gouges.  OP--- does your home insurance cover termite damage?  If not, is there an extra package you can buy directly from your home insurance company?

edited to add--- doing some reading, home insurance doesn't cover termite damage because its considered regular preventative maintenance.  Supposedly it takes years for a termite colony to establish themselves in such a size that it causes real damage to a home, hence it's considered neglect if you didn't catch or prevent it.

I'm really curious to ask my friends because I can't possibly be the only person in the dark about this whole industry.

[reeshau]

We were Midwesterners ignorant of some Southern things (even though my wife grew up in Texas)  One of our surprises was discovering a "small" termite colony when we changed out our doorbell.  An initial mitigation of that was about $1k.  We are now on a service plan that sound like you setup.  The cost is about $100, and if they find something, they will fully deal with it.  I am not aware of any bond or insurance with it.

To me, this deal came down to the same cost as if we had a problem once a decade.  It's relatively nominal, and proactive, so seems like a good deal to me.

[subiegirl]

Unfortunately, our home owners insurance does not cover termites or flooding. Although we can get separate flood insurance, the termite insurance is through pest control companies only. At $100 year, I wouldn’t even think about canceling it, but we are at $275 for the renewal this year and will need to pay the $1,200 to install bait stations if we want to keep it after next year. The annual cost will continue going up at renewal each year. I am leaving towards canceling it, doing lots of research on what to look for and treating ourselves, even adding bait stations. Honestly, I was expecting a lot of “termite insurance is most definitely needed, do not cancel” responses based on what pest control people say, so I feel better that has not been the case. Maybe I am not crazy for considering canceling!

[FlytilFIRE]

I believe the bait stations being discussed are for subterranean termites, and not dry or damp wood termites. Big difference in costs to treat/check on.

Subterraneans (think Formosan) are nasty, and can cause catastrophic damage to a property in a very short number of months. Damp wood termites are easy to avoid by keeping damp wood away from your house. The dry wood termites in south Florida swarm twice a year, spring and autumn. There will be THOUSANDS of them flying around any light, porch, street, whatever.

Down here, most people get their house tented about every 10 years. The annual payments about cover what it would cost you to self insure, so basically it's a wash.

If you really commit to being on top of things, go ahead and self insure, but my house is worth way too much to me, and I've got a lot o my plate, so I'll pay up front and have the experts do the inspections. Oh, I DID have to get the bait stations, because my neighborhood is now infested with Formosans and another Asian termite, along with our run of the mill drywoods.

Do the research on your area, and make informed decisions rather than listening to folks who live a long way from you and have different situations.