Home Insurance companies don’t cover Termite damages primarily because they classify termites as insects. Unfortunately, no home insurance policy covers damages caused by insects. The insurance companies consider insects as an avoidable problem. Hence, it is the homeowner’s responsibility to get rid of termite infestation without any insurance coverage. However, it has never been like this.
Home Insurance Scenario in 2001
In 2001, several insurance providers included termite damages in home insurance policies. The termite damage to Australian homes was much more than overall home damages caused by fire and flood put together during the year. Fearing losses, insurers decided to pull it straightaway.
Ultimately, termite damage fell back under preventive maintenance. Hence, a homeowner must take necessary measures, protect their homes, and regularly inspect by preventing and controlling termites with proper planning.
Rejection of Termite Damage Claims
There have been several instances where unknown small insurance companies offer termite damage covers by giving ambiguously written warranties. Such written policies are not worth the paper they are written on because they never accept termite damage claims. In the majority of cases, they deny the claims by giving flimsy reasons like building defects.
Example 1: Building Defects
Let us understand this properly by taking an example of a typical home that suffered termite damage because of a small crack in the concrete slab. The termites gained access through the gap and caused extensive termite damages within the home. When the homeowner detected the termite damage, he reported the same immediately and submitted an insurance claim. The insurance company declared the insurance cover as void because the insurer deemed the small crack within the concrete slab as a building defect and rejected the insurance claim citing the building defect as negligence and lack of maintenance on the part of the homeowner.
Naturally, any homeowner will feel frustrated with such irresponsible behavior of small home insurance companies. Moreover, the homeowners are then also left responsible for paying the costly repair bills due to termite damages.
Example 2: Wrong Assumption by Homeowners
It is unfortunate but true that most homeowners merely assume that their home insurance policy includes termite damages.
In a recent example, we inspected a customer’s home at Robina. We found considerable termite damages in this home in the Gold Coast area. We got maximum damage in the lounge room. While showing the termite damage, the homeowner asked us to hurry up and organize everything at the earliest. She asked when we could begin the treatment work because she wanted to contact the insurance company the next morning.
Her home insurance policy did not cover termite damage, and she was under the wrong impression that home insurance policies automatically cover all damages. Consequently, she had to take a small bank loan to install a chemical termite barrier. Moreover, she had to incur $27,000 of additional structural repairs to her home because of extensive damages by termites.
Example 3: Termite Damage Considered Water Damage
There are some cases where we had seen insurance claims almost going through before the assessor or contractor discovered any termite damage. To give you another example, we have seen insurance claims for water damage caused by leaking shower heads or plumbing material. Although the damage was initially thought to be water damage, it turned out to be termite damage. When the insurance company knew about this fact, the insurance assessor rejected the claim by declaring that the entire home insurance policy was null and void.
Example 4: Water Damage claim Converted to Termite Damage
I will give one more recent example of a job done by us again on the Sunshine Coast area. In this case, the homeowner had to shell out $60,000 worth of repairs as his house suffered huge water damages inside his home. Initially, it was thought that the faulty plumbing caused such extensive damage. However, while repairing the house, he found out that some early evidence of termites was there. Most probably, a tiny fraction of termite got attracted by the moisture.
It was clear enough that the termites did not damage the property. Simply because a few termites got in due to moisture, the insurance company declared the entire policy void and rejected the claim. The builders also packed up and walked off comfortably. The builder had pulled apart the bathroom, toilet, and shower thoroughly, and debris like skip bins was strewn about there.
In a nutshell, the homeowner was left with the damaged house without any possibility of recovering the large payment bill for repairs of water damages considered wrongly as termite damages, just because the assessor discovered a few termites here and there.
So What Does A Home Insurance Policy Cover?
Both termites and moisture are a nightmare for every homeowner.
We have never witnessed a case where an insurance company covered the cost of home repairs due to termites. At most, they include water damage only.
In rare cases, we have seen that some homeowners quickly got out of it because they detected and treated the termites early. Before the insurer or builder gets to know about the real cause behind the damages, the insurers write it off as water damages and clear the insurance claims. But we have never come across a termite claim paying out.
In any case, prevention seems to be the only best solution for homeowners.
We always encourage homeowners to be proactive instead of being reactive when it comes to termites. Never rely on any insurance company. You must ensure to inspect your home regularly. You should check that your termite control systems are always up to date.
Got A Termite Problem? Get In Touch
If you ever face a termite issue, please get in touch with us. We have a capable team of skilled technicians with a wealth of knowledge and experience. We service North Brisbane and Sunshine Coast areas. Please reach out to our team over the phone so that we can help you.
We stand guarantee for our work and take pride in offering long-lasting and quality termite treatments