American homeowners aren’t living alone. They share their homes with family. They share their homes with pets. And, whether homeowners know it or not, they share their homes with uninvited guests that lead to the top 3 pest claims against home inspectors.
Insects, spiders, and other pests dwell right alongside us and have for quite some time. In fact, some scientists believe that pests like bats and bed bugs inhabited our ancestors’ prehistoric caves some 26,000 years ago. (See figure below and research from
Figure 1: Pest inspectors in the Northeast should find this cave drawing of a camel cricket particularly amusing. Find it in Xavier Belles’ 1997 research paper entitled “Los insectos y el hombre prehistórico” (Insects and prehistoric man).
Modern-day suburbia is no exception to the rule. Let’s review some of the facts from recent research:
So, where does all this leave you, the home inspector?
Pest claims are the seventh most common type of claim in the home inspection industry. (See the list of the Top 12 most common claims here.) Yet, the American Society of Home Inspectors’ (ASHI) Standard of Practice (SOP) explicitly excludes pests. It reads:
13.2.A.11. [General exclusions: The inspector is NOT required to determine…] the presence of plants, animals, or other life forms and substances that may be hazardous to humans….
The International Association of Certified Home Inspectors (InterNACHI) is even more explicit in their SOP. In it, InterNACHI excludes not just the detection of pests but the detection of “evidence” or signs of pests:
2.2.I.A. [Exclusions: The inspector is not required to determine…] the presence of evidence of rodents, birds, bats, animals, insects, or other pests.
With pests explicitly excluded from national home inspection standards, why do pest claims remain common?
Much like mold claimants, pest claimants don’t discriminate: Even if you don’t inspect for pests, you can still fall victim to a pest claim.
However, that’s where the similarities between pest and mold claims stop. As you may remember from our article on avoiding mold claims, most mold claims are filed against home inspectors who do not inspect for mold. (You can read the full article on mold claims here.) In contrast, our claims data suggests that there is no correlation between those who perform pest inspections and those who receive pest claims. That means inspecting for pests neither increases nor decreases your chance of getting a pest-related claim.
So, what does protect you from pest claims?
Safeguarding begins with knowing what types of pests trigger the most claims.
With such a wide variety of pests invading, inhabiting, and damaging homes, it can be tough to know where pest claim prevention should start. Thankfully, our decade’s worth of claims data has revealed that the majority of pest claims fall into three categories.
Over half of the pest claims we receive involve termites, the most prevalent and destructive of all wood-destroying insects.
Termites are common both in geography and number. According to pest control company Terminix, termites exist in every state but Alaska, and over a million termites can make up just one colony.
According to NPMA, subterranean termites eat 24/7, and large colonies can eat as much as a pound of wood each day. With their big appetites, termites cause an estimated $5 billion in property damage each year.
The costs associated with such property damaged and termite treatment help make termite-related pest claims common.
According to HomeAdvisor, a digital marketplace for home services, homeowners typically spend around $528 for termite treatment. However, treating larger infestations with techniques like fumigation and tenting can cost upwards of $2,500.
Repairing termite damage introduces additional costs.
According to Porch, another digital marketplace for home services, the national average range for termite damage repairs is between $319 and $692. The actual price varies depending on the home’s size, the damage’s severity, and the finish options the homeowners choose.
Pest control companies themselves give significantly higher estimates, stating that average costs to repair termite damage range from the low thousands to the tens of thousands of dollars. With repair estimates 10 to 30 times the typical home inspection fee, many homeowners turn to their inspectors to foot the bill.
Figure 2: Infographic of termite damage costs. Statistics courtesy of the National Pest Management Association (NPMA). Graphic courtesy of Western Exterminator.
While not as prevalent as termite claims, rodent-related pest claims continue to be pervasive. According to the NPMA, nearly 30 percent of American homeowners have had a rodent problem in their home with rodents invading approximately 21 million U.S. homes each year.
Like termites, rodents are relentless eaters. Since their teeth grow continuously throughout their life, rodents can gnaw unceasingly without wearing down their teeth. Thus, having rodents in the home can present serious property damage risks that, at their worst, are dangerous. Since rodents can chew through wood and electrical wires, their presence increases the risk of electrical fires.
Rodents pose health concerns, too. According to the NPMA, mice and rats carry disease-causing organisms like ticks, fleas, and lice. Therefore, rodents can transmit diseases such as rat-bite fever, Salmonella, trichinosis, murine typhus, plague, and leptospirosis. At their worst, these diseases can require hospitalization and lead to death.
Rodent removal itself is not particularly costly. HomeAdvisor estimates that typical rodent extermination costs between $90 and $250. However, additional treatment, including repairs and decontamination, can cost as much as $2,000.
Note that the $2,000 figure does not acknowledge the worst case scenario: an electrical fire or a rodent-related illness. Such claims are likely to be more costly.
Figure 3: Infographic summarizing rodent-related statistics in the U.S. Click the graphic to see the full version. Courtesy of the National Pest Management Association (NPMA).
Many homeowners find bats unsettling. But beyond being startled by their squeaks and their rustling wings, homeowners fear how bats could harm them and their property.
The largest health concern presented by bats is the potential that they carry rabies, a fatal disease. However, most bats do not have rabies. According to the Centers for Disease Control and Prevention (CDC), only 6 percent of the bats submitted for testing have rabies. Nevertheless, much like with mold claims, the fear of a life-threatening illness alone can cause claims demands to be more extreme.
More common health concerns that bats present homeowners are bat bugs and histoplasmosis.
Often confused with bed bugs, bat bugs are bloodsucking insects that will bite humans in the absence of bats. According to 1991 research by Ohio State University, many people develop allergies to bat bug bites, and scratching the bits can lead to infections. Bat bug remediation is relatively similar to bed bug treatment, which, according to HomeAdvisor, costs an average of $1,750 nationally.
Histoplasmosis is a fungal infection caused by guano, which are bat droppings. According to the CDC, most people who breathe in Histoplasma spores don’t get sick. Those who do may experience fever, cough, and fatigue, which symptoms are likely to subside without medication.
While bat droppings and urine can present minor health risks like those above, the droppings and urine can also cause property damage. According to Get Bats Out, a bat exclusion service, bat waste can drip through ceilings and ruin insulation. It can also soak through sheet rock or particle board, which can cause damage.
According to HomeAdvisor, bat removal costs $377 on average.
Figure 4: Infographic describing the differences between bat and bed bugs. Courtesy of Catseye Pest.
How to avoid a pest claim
Now that you know what types of pests trigger the most claims, you can better mitigate your risk of incurring a pest-related claim. Here are several of the risk mitigation techniques we suggest.
If you’ve read any of our other articles, you’ve probably heard this advice before: set expectations. Appropriate expectations are essential for mitigating risk and ensuring client satisfaction.
How can you set expectations for pest-related discoveries and issues?
Start by making sure your client understands the limitations of a home inspection and how they apply to household pests.
According to the national Standards of Practice cited earlier, home inspections are visual, non-invasive examinations of the home’s physical structures and systems. Because you can only inspect what you can see, you cannot account for anything hidden from view, such as things obstructed by furniture or personal belongings and things behind walls or below ground.
“The thing about pests that’s hard to deal with is that they’re alive, so they move,” said Travis Hill, Owner of Premier Inspections in Texas. “And because pests move, they are not always visible at the time of the inspection.”
Whenever possible, refer your clients to national, state, and local standards to help them have realistic expectations. In many cases, such standards can act as one of your lines of defense.
William Chandler, Owner of Property 360 in Florida, provides an example:
“The Florida Department of Agriculture protects us,” Chandler said. “It basically says that we can’t see behind walls and, if there is no visible indication—the wall is not rippled, the paint’s not bubbled, the wood is not rotted—and these termites are in the wall because they came up through the middle of the house, we are not liable.”
(For more information on setting expectations, read our article “How to set home buyers’ expectations.”)
For Jim Troth, General Manager of Habitation Investigation in Ohio, pest claims are uncommon. However, he believes that setting appropriate expectations and supporting those expectations in your report are essential risk management techniques.
“We’ve had one complaint about termites, but [the client] tore up the floor in the kitchen to find them,” Troth said. “That’s why it’s so important to put pictures in your report to show what activity is going on [on the day of the inspection].”
Note that it’s important to take pictures of not just the defects but of the non-problem areas. Photographs of non-problem areas can exonerate you when issues arise post-inspection.
Additionally, it’s important to explain what pest inspections are and are not covered in your inspection.
Michael Patton, Founder of AA Home Inspection in Kentucky and Ohio, provides a list of exclusions in both his pre-inspection agreement and his inspection report.
“In our agreement, we specifically state: We don’t do bats. We don’t do rats. We don’t do mice. And we don’t do structural pests unless it’s requested,” Patton said. “Then, we reiterate our agreement in our inspection report.”
If you don’t perform pest inspections at all, it’s wise to include an advisement in your contract’s limitation of liabilities clause. To ensure your clients read your exclusion, our claims team recommends making the advisement stand out with bold or colored font. It’s also smart to have any advisement initialed to show that the client agrees to the terms.
(To learn more about the limitation of liability clause, read our article “Top 5 Things to Include in Your Pre-Inspection Agreement.”)
As with most types of issues discovered during a home inspection, pest infestation is often spotted not by finding the pests themselves but by recognizing their warning signs.
“I’d say three out of ten [homes we inspect] have conducive conditions for termites,” Hill said.
By conducive conditions, Hill means things that encourage wood-destroying insects, like wood rot, vegetation, and wood-to-ground contact.
According to Orkin, a pest control company, the following are signs of termite activity:
- Discolored or drooping drywall
- Peeling paint that resembles water damage
- Wood that sounds hollow when tapped
- Small, pinpoint holes in drywall
- Buckling wooden or laminate floor boards
- Tiles loosening from the added moisture termites can introduce to your floor
- Excessively squeaky floorboards
- Crumbling, damaged wood
- Stuck windows or doors
- Maze-like patterns in furniture, floor boards or walls
- Mounds of drywood termite pellets, often resembling small piles of salt or pepper
- Piles of wings left behind after swarms, often resembling fish scales
- Mud tubes climbing the foundation of your home
- Flying termite swarms anywhere on your property
Since prior termite issues may be an indicator of continuing or future termite issues, Troth recommends noting signs of past treatment in your inspection report, too.
Hill notes that the same strategy of looking for signs rather than animals applies to not just termites but rodents as well.
“There were probably two inspections this year where I saw minor signs of a rat infestation. That’s not seeing a live rat. That’s seeing some feces or a lot of traps lying around,” Hill said.
According to the Environmental Protection Agency (EPA), signs of rodent infestation include:
- Rodent droppings around food packages, in drawers or cupboards, and under the sink
- Nesting material such as shredded paper, fabric, or dried plant matter
- Signs of chewing on food packaging
- Holes chewed through walls and floors that create entry points into the home
- Stale smells coming from hidden areas
According to Reader’s Digest, signs of a bat infestation include:
When performing both standard and pest inspections, it’s important to inspect to both national and regional standards. Inspecting beyond such standards without additional licensure may increase liability.
For example, in the state of Kentucky, the Department of Agriculture requires an additional license for each type of pest inspection. For instance, if you’d like to point out the presence of termites, you have to have a termite license. Or, if you want to inspect for rodents, you have to have a rodent license. And the list goes on.
“We never come out and say you have bats in the attic even though I’ve stared at them several times. I don’t hold the license for it, so, in Kentucky, I can’t say that I’ve seen it,” Patton said. “We say it appears to be a bat infestation and recommend further assessment by a pest control company.”
Chandler believes that inspecting by specific standards allows home inspectors to both perform thorough inspections and mitigate risk.
“Inspect by the rules. Don’t cut corners. Document your work and report what you find,” Chandler said. “Don’t be afraid to recommend additional assessment if you think it’s warranted. It’s not our job to close the sale. It’s our job to protect the buyer.”
Even if you do everything right, you can still get a pest claim. That’s why it’s essential to carry errors and omissions insurance (E&O) for defense and payout help.
Keep in mind that, if you do not carry the pest endorsement, your insurance company will not offer claims assistance and coverage. Whether to carry the pest endorsement when you don’t inspect for pest to qualify for insurance coverage is a risk appetite question for every inspector individually.
When carried, the InspectorPro pest endorsement offers coverage for not only wood-destroying insects but any pests found in “the examination of readily accessible systems and components.” However, our current pest endorsement does not apply to any inspection or examination for cimex lectularius, commonly known as bed bugs, or related pests. In addition, pest remediation and eradication are not currently covered.
Want to add the pest endorsement to your policy? Contact your InspectorPro broker or submit an application with us to receive a quote at no obligation.
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