Wireless Home Alarms – Understanding Your Alarm Monitoring Contract

You might think the primary purpose of your alarm company’s contract (aka “Subscriber Monitoring Agreement”) is to hold you to a payment schedule for a prescribed period – but that’s just part of it. Lots of services with a monthly fee require a contract: cell phones and cable are good examples. However, your home security subscriber agreement deserves a closer look, because there’s a lot more to it. Not all alarm companies take the same approach, so I’ve compiled a short list of the issues that you should research in advance. But first, here’s a link to a story of an alarm customer who was snared by a contract detail.

Adams is the first to admit that he should have read over that contract more thoroughly before signing on with another company. But, what he says really pushed his buttons is the way the company responded to his request for cancellation.  "They told me if I didn't pay it within 10 days they would send it to a collection agency, very inappropriate," said Adams. "People need to really read their contract thoroughly and understand how the renewal process is going to occur and maybe they can avoid these extra fees," he said.

In this case, the subscriber changed alarm companies, not realizing that after the initial term, his contract automatically renewed for subsequent three-year terms. While most alarm contracts renew for one year or month-to-month (regardless of initial term length), some do not – and you should know that up front. While a standard alarm monitoring contract may have as many as thirty separate clauses, here is my list of the important ones for you to consider.

• Initial term and renewal. Most companies require at least a three-year initial term, and some ask for five years - but a handful can be more flexible. The price you pay for equipment may be related to the length of your commitment: longer initial term should mean bigger upfront discount. Renewal should never be longer than annual or month-to-month – and there are at least five states that require month-to-month renewals, unless you agree in writing, in advance, to a longer renewal term.
• Exculpatory language. This is standard language that says, among other things, that the alarm company is not an insurer. I have never seen a subscriber monitoring agreement without this clause – and I have seen hundreds of different monitoring agreements.
• Limitation of Liability. This clause sets a cap, usually $500, on the amount that the alarm company will pay in the event of an actual loss. Since the alarm company is not an insurer, subscribers requiring more coverage should review their insurance coverage, and increase it when necessary.
• Ownership of equipment. Many alarm companies “lease” the equipment to you, so that even after you meet your contractual requirements, the equipment is still not yours. The best companies make the equipment yours up front, so that you can easily change companies later. Also, choose a company who sells quality equipment with a brand name, like GE, and avoid companies who sell their own “proprietary” equipment, since you are stuck with them forever.
• Risk-free trial period. Most alarm agreements contain only the standard three-day Right of Rescission language required by the FTC (Federal Trade Commission) for in-home sales. You should have a full 30 days to make sure you are satisfied, or you get a 100% refund. As for that in writing.

We worked very hard to make the FrontPoint monitoring agreement as balanced and easy to understand as possible: one example is our options for initial agreement term of one, two, or three years. Even so, we still get questions, and are happy to answer each and every one. On-line shoppers quickly learn why we are the nationwide leader in interactive, wireless home security: the long list of five-star reviews spells it out pretty clearly. Being on top means we have to prove ourselves in every aspect of our business – even the “boring” things like contract language. It all matters, and we invite you to experience what sets us apart. We promise to “wow” you!