Historically, we have referred to termite contracts on our client's homes as Termite Bonds.  It is important that we do not just generically call any termite coverage a BOND with the assumption that the home is covered for termite damage repairs.

The termite coverage contracts have changed over time, and the industry momentum is trending towards Termite Warranties, which mainly just provide coverage for re-treatment only. Some termite companies still refer to their protection for retreatment warranties as Bonds, which may mislead the consumer about their purchased termite coverage.  

Excluding the types of termites that are included or excluded in contracts, there are basically two types of termite contract coverages available in the market:

From a Google search:

1. Retreatment-Only Bond: This is the most common and affordable option. It covers the cost of exterminating termites if they return, but the homeowner is responsible for paying for any structural repairs.

2. Repair Bond (Retreatment + Repair): A more comprehensive (and expensive) plan that covers both the treatment and the cost of repairing structural damage caused by termites while the bond was active. These often have a coverage cap, such as $50,000 or up to $1 million."

There are some companies that offer both retreatment and repair coverages, but many companies are steering away from repair coverage.

We currently have a deal going on a home in Foley. The seller's existing termite coverage is a repair contract. When we inquired if the contract could be transferred to the buyer, the response was, "Sure, but the coverage is changing to retreatment only, no repair contracts will be provided anymore".  

This triggered us to call around with other companies, and the vast majority were only covering retreatment, and the names of the coverages were referred to as bonds, warranties, or coverage, although the actual protection was only for retreatment.

The caution here is that we need to ask about coverage and not simply just tell the random company we need a "termite bond". That ship seems to have sailed. Not to mention if the contract treats or covers subterranean termites but excludes Formosan coverage.

Don't get me wrong, there are still some companies that offer the repair contracts, the difference today is that we need to ask and study the contracts, whereas in recent years our general assumptions about the contracts being repair were mostly correct.  

As I write this, I don't even know if I have retreatment or repair coverage at my own home…and my home is covered by the large company that has been involved in several recent large lawsuits.  I don't even know where my contract is located.   Yikes.

We are frequently asked to provide a list of termite companies to clients. That is fine, but even though we are not vouching for the strength or type of the coverage each company has, we should at least tell our clients to ask the questions as they consider which company to hire.