Does Homeowners Insurance Cover Termite Damage?

Usually not. The National Association of Insurance Commissioners (NAIC), the organization of state insurance regulators, says damage caused by termites, rats or other infestations is not typically covered by homeowners insurance. The widely used Homeowners 3 policy form excludes loss caused by “birds, vermin, rodents, or insects.” For termite damage it makes one narrow exception: a sudden collapse caused by insect damage that was hidden from view.

What the standard policy says

The standard policy names insects and rodents among the causes of loss it does not cover. The NAIC’s consumer guide says homeowners choose the Special Form, known as the Homeowners 3, more often than any other form, and describes it as insuring a house against all perils except those the policy specifically names as not covered. Insurance Services Office (ISO) publishes the standard version.

In the 2000 edition of that form (HO 00 03 10 00), the causes named as not covered sit in one list: wear and tear and deterioration; mechanical breakdown and latent defects; smog, rust, corrosion and dry rot; settling and cracking of foundations, walls and floors; and “birds, vermin, rodents, or insects.” Termite damage falls within that wording. Treating for termites is not an insured loss in the first place; the NAIC guide describes upkeep of the home as the owner’s responsibility.

Insurers’ own forms and other editions may word the exclusion differently. The text that decides a claim is the exclusions section of the policy on your house. The NAIC guide suggests putting specific coverage questions to an agent before buying, such as which types of water damage are not covered; the same question works for insects and rodents.

The collapse exception

The same 2000 form restores coverage in one situation. Under its “Collapse” additional coverage, it pays for direct physical loss involving collapse of a building or part of a building caused by “insect or vermin damage that is hidden from view, unless the presence of such damage is known to an ‘insured’ prior to collapse.”

The form defines collapse narrowly:

• It means “an abrupt falling down or caving in” of a building or part of one, with the result that it cannot be occupied for its current intended purpose.
• A building in danger of falling down is not in a state of collapse.
• A standing building is not in a state of collapse even if it shows cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.

Read against that definition, a sagging floor or a joist found hollow during a renovation does not meet it. A section of floor that falls in because of damage no one could see might. Knowledge matters too: once an insured person knows about the damage, this coverage no longer reaches it.

Why insurers treat termites as maintenance

Insurance pays for sudden events, not slow deterioration. The NAIC guide puts it plainly: “A homeowners policy isn’t a maintenance contract; it insures against damage from perils such as fire, wind and hail.” It adds that a policy does not pay to repair things that simply wear out.

Termite damage builds slowly. The University of Georgia’s termite bulletin notes that a new colony may need 5 to 10 years to grow past 10,000 termites, and that colonies feed on wood gradually. Years of hidden feeding is slow damage, not a sudden event.

Rodent damage and chewed pipes

Rodents fall under the same exclusion. The 2000 form, however, attaches an exception to that list: unless the loss is otherwise excluded, it covers damage to the house resulting from an accidental discharge or overflow of water or steam from a plumbing, heating, air-conditioning or fire sprinkler system or a household appliance. It does not pay for the system or appliance the water escaped from.

Whether that exception applies after a rodent chews through a supply line depends on the wording of your policy and on the insurer’s review of the claim. Policies differ, so ask the insurer in writing rather than assuming either way.

What protects you instead

Two kinds of agreement can cover termite damage that insurance excludes.

A termite service agreement with repair terms. North Carolina’s Department of Agriculture describes agreements that cover re-treatment only, the usual practice, and agreements that also repair damage up to a stated amount, which not every company offers and which may require the house to meet conditions. The Georgia bulletin explains that repair agreements cover new damage, generally require proof of live termites at the damaged site, and usually exclude damage that existed when the agreement began.

A builder’s guarantee on a new home. When a lender, FHA or VA requires termite prevention in new construction, the builder signs form HUD-NPMA-99-A. Where a pest control company applied the treatment, the form guarantees further treatment without cost to the buyer if subterranean termites infest the house within one year of closing, and repair of termite damage during that year.

A home warranty is a different product. The NAIC guide notes that a home warranty covers mechanical breakdown of parts of a home, such as electrical and plumbing systems, and does not cover the home’s structure.

If you find termite damage

Work through these steps in order:

1. Document before disturbing anything. Photograph the damage and any live insects. The Georgia bulletin notes that photos or video of live termites help support a claim under a repair agreement.
2. Read the policy. Check the exclusions and the collapse coverage, then ask the insurer in writing whether any part of the loss is covered.
3. Have a licensed company confirm activity. EPA advises that firms offering termite services must be licensed by the state, and suggests asking to see the license.
4. Use any agreement you hold. If the house has a termite service agreement, report the finding to that company under its terms.
5. Escalate if needed. The NAIC guide notes that state insurance departments have consumer services staff who can help resolve a disagreement with an insurer.

When to call a professional, and what to ask

A licensed pest control company should inspect as soon as damage turns up, because treatment and any claim both depend on whether termites are active now. Structural repairs may involve a separate contractor. Questions worth asking:

• Are termites active in this damage now, or is the damage old?
• Which species is this, and where are they entering the house?
• Will you put the findings in writing, with photographs I can give my insurer?
• Does any existing agreement on this house cover re-treatment, repair or both?
• Should the treatment be finished before damaged framing is repaired and walls are closed?