Is your home security provider robbing you blind?

Recently an old high school friend asked me my advice on home alarm systems. I let my resident home technologist (AKA the husband) write my very first guest post (thanks Honey!) And wouldn't you know it--the instant I hit submit EVERY Google AdSense ad in my sidebar is from ADT! I guess ADT doesn't realize this post is about how they are ripping so many people off!

The alarm business is dominated by a few national brands such as Brinks and ADT. Consumers don't want to pay a lot upfront for an alarm system. Alarm companies want to maximize their profits and the way they do this is through recurring monthly revenue.


So what is likely to happen when you call ADT or Brinks is that they will have a "special" where you will pay $100 or so for an "alarm system." They will also have you sign a contract for $30-$40 per month for a two year term. This contract will also automatically renew for another year at that same rate, unless you contact them in writing between 30-60 days prior to the two year anniversary and ask to discontinue service. If you do discontinue service, you will also likely find that some of the equipment they installed is proprietary to that vendor and can not be reused if you change alarm service providers. The wholesale cost of providing an alarm service is around $5 a month, so this low upfront, high recurring charge deal is very profitable for them.


These national alarm companies typically will offer a very minimal alarm system which consists of a sensor on the front and back doors, a single keypad, a siren and a single interior motion detector. This is really not what most people should be using if they really want to adequately protect their house and their family. From their point of view, all you need is --any alarm system-- and they get their $30-$40 per month.


A good alarm system should protect the perimiter of the house via window contacts and/or glass break detectors. It should have several interior infrared motion detectors as a backup in case the bad guy gets past the perimeter. It should also detect smoke and automatically notify the fire department. A smoke alarm that goes off when no one is home to call the fire department won't keep your house from burning down. It is important to protect the entire perimeter of the house so that a burgular is scared off and never gets the chance to enter the house.

Most times the national alarm companies want to get in and get out fast with the installation. So they will use wireless components in a "lick and stick" installation. These components will be stuck to the interior of the buidling with double stick foam tape. Using wireless components costs a little more, but saves them the cost of having to run wires. Wires are preferable for the homeowner (if installed by a skilled installer) as it means better reliability and no batteries to change ever on sensors! Wireless installations will require service calls for battery replacement every few years.


So what would I recommend? I would recommend contacting a local alarm company not ADT or Brinks. You can find them in the yellow pages. Tell them that you want to pay for an installation, but that you don't want any monitoring service. Have them quote only the cost of the installation and alarm system programming. Tell them that you want them to leave you with the "installer code," which is the code that allows additional changes to be made to your alarm system. They may balk at this initially, but they do this deal all the time for new house builders. They really want to get the monthly monitoring commitment (and the recurring revenue it provides), but be firm. Pay their hourly rate for time and materials (or a quote for the job) and have them install a system that protects the perimieter, includes fire and includes motion detectors throughout the basement and first floor levels. Include an "alpha" keypad in both the entry areas as well as the master bedroom. (Alpha is important so that when the alarm goes off a 3 in the morning you can see "basement window alarm" rather than "Zone 12 alarm." Are you going to really remember what "Zone 12" is at 3:00 in the morning?)


So after you have the equipment installed, go to an Internet alarm service provider such as nextalarm.com or alarmrelay.com. They will be able to walk you through getting your alarm system conntected to their service. And now the best part -- their service will cost from $8.95 to $11.95 per month! These services will likely include additional features (e.g. we get a text message to the cellphone when anyone arms or disarms the system, also medical panic monitoring) that you would have to pay extra for with the big name companies. Very quickly the monthly savings will far more than pay for the extra upfront cost for the more advanced alarm system.


One final point -- alarm systems (especially wired ones without sensor batteries to change) require very little monthly maintenance. Don't sign up for a service contract. Just pay for repairs when they are needed.