Termite damage is estimated at $2 billion nationally. Of that amount, approximately $500 million is attributable to the State of Florida. Homeowners insurance typically does not pay for termite damage. Since the EPA’s banning of the termiticide chlordane in 1988, many Florida homeowners are unhappily learning about the limited protection provided by a termite repair guarantee.
Repair guarantees can offer to repair damage up to $250,000. Unfortunately, these guarantees give homeowners a false sense of security. Most homeowners believe that if they have a termite infestation, the termite company will find the damage and repair the damage. This is not necessarily true. To protect their homes, homeowners must take an active role in finding the damage and seeing that repairs are done properly.
Termites are cryptic insects. The damage they cause is usually hidden behind walls making it difficult to find damage. To estimate the extent of damage, a homeowner must closely examine areas that show signs of infestation. See Infestation. For example, on close examination of a swarm, there may be a small hole in the baseboard or the windowsill. What the homeowner needs to know is that the damage could go far beyond just replacing the baseboard or windowsill.
A house is a compilation of components that makeup what you see and don’t see (structural components). These components that you don’t see are the ones that are damaged by termites and are the most difficult to detect and repair. Coming from the ground up just think of all the wood the termites had to eat to get to your windowsill. All houses depend on structural components to function and must pass code requirements in order to receive a “certificate of occupancy”. When termites eat these structural components a house is no longer in compliance with accepted industry standard as outlined by the building code. The consequences of such damage can result in the failure of the house, e.g., walls collapsing, windows falling out, doors falling off, etc. The damage can also prevent a homeowner from selling their home for full market value (diminution of value) because mortgage companies will not finance a home with extensive termite damage and buyers are reluctant to purchase a home that has had frequent infestations.
What should a homeowner do when they know that termites have invaded their house? Unfortunately, pest control companies may not be motivated to investigate damage – they have no contractual obligation to investigate infested areas. There is an inherent conflict of interest because the more damage a termite company finds, the greater their liability. Because of this conflict, a homeowner should seek independent professional help in discovering the extent of the damage. Here are some guidelines to in choosing a contractor:
After finding a qualified contractor, you should begin to investigate damage. Most termite companies require you to have a company representative present when opening walls. Be sure to videotape and photograph the investigation. Document and keep all correspondence between you and the pest control company.
Another method of investigating damage is a new technique called resistograph testing. See the following websites for more information.
If you discover damage, the negotiation process will begin. Be aware that a termite company is similar to an insurance company in that they want to repair your home as inexpensively as possible. However, unlike an insurance company, the “bad faith” laws that govern insurance claim practices are not applicable to the pest control industry. This can leave a homeowner at a disadvantage.
Claims are frequently denied because of no "live" termites, excessive moisture, conducive conditions (conditions that support termites) or no structural damage. These denials may be valid or invalid. Some pest control companies deny valid claims because they gain substantial financial and economic advantage by denying claims. The unchallenged denials can save them considerable amounts of money which in reality they would otherwise be obligated to pay.
Many homeowners may not realize when their claims are denied unfairly. Homeowners usually trust their pest control company and do not challenge their decision to deny a claim. Don’t let this happen to you! Fight back and make your pest control company accountable - the squeaky wheel does get the grease! Here are some suggestions if your pest control company denies a claim that you believe is valid.
Some termite companies may honor your claim but give you a reduced settlement. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled to would be an unfair claims practice. Document, complain and fight back! Termite companies are required to do a “first rate repair” (Del Guidice versus Orkin), or they may be liable for the diminished value of your home caused by termite damage.
Even when a termite company requires you to use their contractor, request that you use your own. A termite company may not hire the most qualified contractor to repair your home. Again, the termite company’s incentive is to repair your home as inexpensively as possible.
If you must use the pest control company’s general contractor, confirm that they pull a building permit and request all of the required inspections. You may confirm this information with the county building department. Note that while termite companies normally perform background checks on their employees, they may not perform background checks on the general contractors they hire. You may want to investigate the background of their contractor.
Termite companies frequently discourage customers from opening walls (not necessarily an expensive undertaking) by emphasizing that the homeowner is responsible for the cost of the investigation if no live termites or damage is found. By not opening walls, termite companies are given time to kill the termites and possibly later deny claims because there are no live termites. If you have a swarm or sign of an active infestation, open your walls as soon as possible with a termite company representative present. The cost to open a wall by a qualified carpenter or contractor is usually immaterial compared to the cost of ignoring damage. To protect yourself, DOCUMENT the opening with videotape.
If you have damage in a baseboard, termite companies may indicate that the damage is just in the baseboard. Don’t rely on your termite company to find more damage. Homeowners must be very aggressive in finding and uncovering damage. If termites are eating your baseboards, it is very likely that you have structural damage in your walls. Remember termites come from the ground up daily and eat wood from the ground up.
Claims are sometimes denied without proper investigation – termite companies claim either that there are no live termites, no structural damage or moisture conditions. All of these claims may or may not have validity; however, termite companies frequently apply these claims to their advantage to avoid paying valid claims. In the insurance industry, this practice may be considered an unfair claims practice. But remember all of those unfair claims practices that govern an insurance company are not applicable to a termite company. There are no laws in Florida to protect a consumer against an unscrupulous termite company that knowingly denies valid claims. If a claim is denied, ask for the company to put the denial in writing with an explanation as to why the claim was denied. Ask for documentation of denial and investigative steps taken by company to determine whether the claim was valid. Be sure to document the company’s investigation. Remember Document, Document, and Document! Then FIGHT BACK…THE SQUEAKY WHEEL DOES GET THE GREASE! File a complaint with the Better Business Bureau, the Attorney General, the Department of Agriculture, call the consumer reporters for your local TV station and newspapers, etc. Valid claims should not be denied!
A termite company may deny a claim because of excessive moisture. In many homes in the southeast, there are minor leaks in outside walls or windows. Termites need moisture and can generally be found in high moisture areas. Some contracts state ambiguously that the customer is responsible for termite damage when water leakage allows “termites to exist in my building” and thus the effectiveness of their treatment is destroyed. For termites to exist in a building, there must be an “aerial colony”. An aerial colony is an above ground colony of termites that do not need to return to the ground for moisture; whereas subterranean termites must originate from the ground. Thus, if termites are going to the ground, the company should be liable for at least part if not the entire repair regardless of the amount of moisture. Termite company managers eventually admit this when confronted directly with this argument. Most homeowners and even attorneys do not understand the “moisture” clause in termite contracts. Ask the Termite Company Manager if the termites are coming from the ground. State that you believe they are and that their supposedly continuous barrier has been ineffective and they should be liable for the repair. Aerial Colonies are very rare occurring less that .001 percent of the time for native subterranean termites.
In three major metropolitan areas (Tampa, Jacksonville and Orlando) and probably all areas of the country, some termite companies are hiring contractors that are violating state building laws (a misdemeanor) by not pulling permits. It is clear that their intent in repairing homes is to complete the work as fast and cheap as possible, with little regard to the right way to make repairs or the proper procedures for licensing, permitting and inspections. Unpermitted repairs reduce the value of your home and could prevent future buyers from purchasing your home. Also, it is difficult to get financing or insurance on a home with construction defects or termite damage. If a termite company contractor has performed repairs to your home, call your local building department to confirm whether or not a building permit has been pulled on your home. If one has not been pulled, send a letter to your termite company and ask them to have your home repaired legally and inspected properly. If a termite company is sending a contractor to your home, ask the termite company and the contractor to pull a permit! All repair work performed by a termite company contractor requires building permits – don’t let your termite company tell you otherwise.
Mistake 6. Complying with your termite company and signing a release so the contractor can get paid.
Some termite companies require customers to sign a “release” that releases the company from liability for the repairs and termite damage. Companies present the release as something that “needs” to be signed so that the contractors can get paid. The termite company has the contractor present the release to the customer. Customers do not have to sign the release. Apparently, customers only have to sign a release if they receive something beyond the terms of the original contract.
In DelGuidice v. Orkin, even after seventeen ineffective termite treatments, Orkin was not liable for diminished value of a home as long as Orkin provided a “first-rate repair” of the property. Some termite companies are not doing first-rate repair work. They frequently do repairs from the inside of the home – without regard to the proper construction techniques. Demand that a licensed contractor repair your home to like-kind condition. If your home is not repaired in like-kind condition, the company could be liable for diminution of value of your home.