Demystifying Home Insurance: Does Your Policy Cover Termite Damage?

Termites cause an estimated $50 billion in damages every year—more than floods, fires, tornadoes, and hurricanes combined.[1] These little bugs eat cellulose that makes up your floors, joists, roofing, and supports. If left unchecked, some termite colonies can turn an entire home into powder. 

Most homeowners insurance policies won’t cover termite damage.[2] Instead, these pests are considered a maintenance issue. You’re expected to spot them and take action when you do. 

Protect your home from termites through regular inspections, smart landscaping choices, and pesticide treatments (as needed). You’ll keep colonies from growing large enough to harm your home.

If termites are common in your area, a special insurance rider can help you cover unexpected expenses. And if a crisis happens (like a burst pipe), you can work closely with your standard insurance company and see if they will help you. The claim may be denied, but you could decide the potential payout is worth the risk. 

How Can Termites Harm a Home? 

Termites are tiny creatures that feast on wood products. Since most homes are packed tight with wood, even a small colony can do an intense amount of damage in a very short time. 

Several different types of termites exist.[3] This table can help you understand their differences and similarities:

	Where Are They?	How Do They Get In?	What Damage Can They Cause?
Dampwood termites	Washington, Oregon, and coastal California	Wood dampened by leaky pipes or heavy rainfall	Weakened wood close to the source of the leak
Drywood termites	North Carolina to Southern California	Any crack in your home	Weakened decks, fences, porches, windowsills, or furniture
Subterranean termites	Primarily in the deep South but found all across the United States	Damp wood in contact with soil	Extensive damage, which can demolish a home

Termites & a Standard Homeowners Insurance Policy 

Every homeowner should review their policy carefully and determine what is and is not covered. Review yours, and you could determine that your termite infestation is your responsibility or one you share with the insurance company. 

When Isn’t Termite Damage Covered?

Almost all standard homeowners insurance policies specifically exclude pests, including termites.[4] Companies believe that damage happens slowly enough that an average homeowner has time to spot the issue and fix it. 

Homeowners in Tennessee discovered termites in a home they had purchased and were renovating. The colonies were huge and required extensive changes to their plans. Thankfully, their renovation budget was large enough to cover the expense, as the insurance policy wouldn’t pay.[5]

A nonprofit in Jacksonville wasn’t so lucky. This group planned to renovate an older building listed on the National Register of Historic Places. Extensive termite colonies were found, and the insurance company wouldn’t pay for repairs. The organization had to pay to demolish the building out of funds they hoped to use to fix it.[6] 

When Is Termite Damage Covered?

While it’s very rare, some homeowners have filed successful claims for termite damage. Typically, they can tie the infestation to a covered event, such as a burst pipe or hailstorm.[4] The covered issue allowed the insects to enter, so the infestation damage is covered. 

Some policies may also cover termite damage if the colony builds up so fast—and causes so much damage—that there’s no way for the homeowner to step in and make repairs quickly enough. This type of payout is very rare, but it’s theoretically possible. 

Adjusters encourage homeowners to be reasonable. One Florida professional says insurance companies are increasingly denying valid claims, including one in which the company blamed termites and not a tornado for a homeowner’s loss after a storm.[7] Even if you think you have a claim, it could be denied. 

Enhanced Termite Protection Through Bonds 

While your homeowners policy may not cover all termite claims, you do have options. Some pest control companies and private insurers offer termite bonds (also called termite insurance). 

These products cover routine maintenance (like inspections and insecticides), and they can help fix problems if termites appear despite your maintenance. 

Prices vary, but they typically range from $500 to $2,500. Some are transferable too.[8] If you hope to sell your home, a bond could demonstrate that you’ve prevented this common pest to the best of your ability. 

Even with a bond, you could face struggles when termites appear. In Atlanta, for example, homeowners are suing a pest control company for termites living beneath spray foam insulation. The homeowners say the company should have caught the bugs. The company says the insulation invalidates the claims.[9] 

Always read insurance documents carefully and understand what is (and isn’t) covered and what decisions might invalidate your coverage.

How to Spot Termites 

Some homeowners know they’re dealing with termites when they spot scat, wings, or dead insects inside your home. Other signs can indicate a more significant infestation. 

Watch for the following termite calling cards:[1]

• Swarms of termites inside and outside of your home 
• Small piles of wood shavings 
• Holes in visible wood 
• Crumbling drywall 
• Sagging doors 

If you see these signs, grab your homeowners insurance policy and read it to determine if the problem is covered or specifically excluded. If you have any questions on your coverage, contact your provider directly to get clarification.

How to File a Termite Claim 

If the termites inside and around your home are covered within your insurance policy, it’s time to file a claim. Take action as soon as you spot the bugs. Delays of even a day could mean a denied claim.

Follow these steps as soon as possible:

• Contact your agent and explain that you want to file a claim. Explain how the bugs are part of a covered event (like a burst pipe). 
• Use the list of symptoms above to document all of the termite damage you can see. Take plenty of pictures and videos to ensure you have sufficient evidence of the event and associated damage. 
• Schedule an in-person visit with an insurance adjuster. 
• Negotiate for an appropriate settlement with the insurance company.
• Hire someone to fix the damage.

If you’re not happy with the settlement suggestion, talk with your agent. Together, you might come up with an amount that seems more appropriate. If you’re still unhappy, you could contact a lawyer and fight for your rights in court. 

How to Prevent Termites 

A good defense is the best way to keep termites out of your home and away from your homeowners insurance policy. 

Take the following steps:[10]

• Repair leaks inside and around your home. 
• Keep mulch at least a foot away from your home and associated structures. 
• Trim trees and hedges at least 18 inches away from buildings. 
• Keep water draining away from your building. 
• Remove tree stumps, especially if they’re close to structures. 
• Don’t store firewood close to your home or other structures. 
• Seal gaps in your home’s foundation as soon as you see them. 
• Repair screens and doors to keep bugs out. 

Keep Your Home Free From Termites 

A standard homeowners insurance policy won’t cover termite infestations. Inspect your home regularly and ensure the bugs don’t get in. Take preventative steps regularly. If you live in an area where termites are common, consider purchasing a termite bond for additional protection from these devastating bugs.