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Calculating the True Cost of an Alarm

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A couple years ago, we wrote a post sharing 6 Imortant Questions to Ask Security System Providers. We created that post to attempt to help security shoppers navigate the issue of finding an alarm provider. After all, the variety of equipment and business models in the industry can overwhelm potential customers. As part of that post, we explained that some companies attempt to hide the “true” cost of installing their product. Many companies use a flashy low installation price to mask a low-value alarm system. Unfortunately, customers often find themselves locked into long-term financial commitments after discovering their mistake. In this post, we aim to help you calculate the true cost of an alarm.

For starters, we will explain what up-front fees entail and why they differ so greatly. Many customers find it strange that different companies provide them with greatly differing up-front equipment costs. Then, we will explain how to “interpret” a quote for monitoring services. Surprisingly, this seemingly simple service comes with more options than most homeowners realize. This section will help you create an apples-to-apples comparison of different companies’ monitoring rates. From there, we will share how companies use different monitoring policies to make more money. After all, you didn’t think that you were going to install a dirt-cheap alarm and not end up paying for it somewhere down the line, did you? This section explains how national security companies can install cheap or even free alarms and still make money. Now, let’s get started with a look at the up-front cost of an alarm!

Someone using a calculator, paper, and pen to add numbers.

In order to come up with a complete installation cost for your alarm, you must design your entire system and take all equipment pricing into account.

Tallying Up-Front Equipment Fees

When customers start shopping for an alarm, they often begin by finding cost-related information. Security companies often create ads showing a low price for a “base package.” Some companies even simply adverise a free alarm system! Of course, things get a little more complicated when you read the fine print. These prices come with a caveat that equipment above and beyond the “base package” will cost extra. Additionally, the base package often comes with an extremely limited amount of equipment. In turn, this equipment provides a minimal amount of security.

In order to determine the equipment cost of your entire alarm system, you need to create a complete system design. To help you do so, we recommend you call alarm companies around you for a site survey. This can help you design the most efficient and effective alarm for your property. Furthermore, it allows those who may install the alarm to see the property before starting work on it.

Of course, different companies may recommend slightly different types of equipment. Take these into account and go with the list of equipment you think works best. From there, you can start getting an idea of what your complete alarm will actually cost. Furthermore, it will help you accurately compare the total up-front costs from multiple providers. Of course, you still have some work left to do to determine the best value available to you. Now, let’s look at another important contributor to the true cost of an alarm.

Finding the Full Cost of Monitoring Expenses

When people install alarm systems, more often than not they have these systems monitored. This service creates a connection between your alarm and a central station. Up activation, monitored alarms call out to the central station to create an emergency response. At that point, a central station dispatcher calls the property to see what has happened. If nobody answers, or if the person who answers cannot provide the “passcode” chosen upon the alarm’s installation, the dispatcher calls the proper authorities.

On the surface, this process sounds simple enough, right? However, this service actually comes with more variables than most alarm shoppers initially realize. In fact, we created a post describing Unique Security Monitoring Options chock-full of different ways companies provide this service. In this section, we share some of the variables behind alarm customer’s monitoring rates. Let’s get started by seeing how different types of alarm communication can affect your monitoring bill.

Different Forms of Monitoring Communication

For starters, some companies connect alarms to onsite phone lines to allow the alarm to call the central station. This provides the least expensive means of alarm monitoring. Unsurprisingly, it also represents the least secure method. Alarms monitored by phone lines fail to dial out when the phones go down. For this reason, we recommend cellular alarm monitoring. This service utilizes a cellular dialer and a cell network, rather than phone lines, for monitoring. Therefore, phone line issues or the lack of a home phone will not affect monioring services. Of course, installing a cellular dialer generally involves an extra cost for both equipment and cellular communication. However, it also allows customers without phone lines to install a monitored alarm.

A contract and pen

Make sure to read the fine print regarding contract length and renewal policies before choosing your alarm company.

When receiving quotes for alarm monitoring, make sure you know how alarm companies plan on monitoring your security system. Occasionally, customers without phone lines commit to an alarm provider based on a low monitoring rate. Upon installation, the alarm company will then inform the customer that they need phone lines present to take advantage of those low rates. Instead, customers often opt for cellular dialer-based monitoring at this point. This surprise expense may push the total monitoring bill above that of other companies who included cellular monitoring in their price to begin with. For this reason, we always recommend getting a crystal-clear picture of how different alarm companies plan on monitoring your security system. Now, let’s look at a couple variations within alarm companies’ monitoring practices that help determine the true cost of an alarm.

Multi-Year Monitoring Contracts

As we mentioned in our introduction, companies with the least expensive installation prices have to make their money down the line. They often do so using multi-year monitoring contracts. These contracts guarantee these companies make their money back in a couple ways. For starters, companies often “roll” some of their equipment cost into high monthly monitoring rates. Even companies that give equipment away can quickly recoup the cost of their product in this manner.

Secondly, the multi-year commitment ensures that customers cannot cancel their monitoring before these companies have made their share of money, and then some. In this manner, some security companies “hide” the true cost of an alarm. Of course, not all alarm companies follow these business practices. At Northeast Security Solutions, we provide customers with month-to-month monitoring. This allows for cancellation of monitoring at any time, for any reason. Next, let’s look at another related way sneaky security providers pad their pockets!

Unexpected Fee Increases and Tricky Cancellation Policies

Any service company will need to occasionally raise service prices as operation costs increase. However, some alarm companies utilize regular, pre-planned monitoring rate increases. This allows them to make more money off of customers that they have already locked into a contract. Therefore, these customers cannot cancel their monitoring to avoid paying these new rates.

A folder with a label marked "Cancel"

Some companies make it as difficult as possible for customers to cancel alarm monitoring service. Photo Credit: Nick Youngston on Picpedia. Used under the CC BY-SA 3.0 License. 

Furthermore, these companies often make cancelling monitoring service difficult even after the contract’s expiration. They do so with contracts that auto-renew for the same period of time that you initially signed up for. For example, you could sign a three-year agreement with an auto-renewal clause. At the end of three years, a new three-year cycle begins. Now, let’s say you call your alarm company to cancel after four years due to high monitoring rates. Upon doing so, you will be informed that you cannot cancel for another two years do to the contract renewal! These small “games” some companies play can make a “cheap” alarm install cost quite a bit of money down the road. For this reason, we always recommend going over any alarm paperwork carefully before signing up. Doing so and asking questions can save you quite a major headache — as well as some major cash!

Putting it all Together to Find the True Cost of an Alarm

We hope that this post helps you determine the true cost of an alarm during your search. Many alarm shoppers find themselves overwhelmed with all of their options, and for good reason. After all, every company uses different business practices while installing and monitoring their product. Furthermore, as we demsonstrated, some companies intentionally make it very hard to cancel their services. Unfortunately, this can frustrate customers and hurt the reputation of the home security industry as a whole.

Please do not hesitate to contact us if you have any questions about installing security products. We can walk you through any security plans or offers. Additionally, we offer free site surveys of our own. While on site, we can help you design an alarm system that meets your needs. Following our visit, we provide an easy-to-understand proposal that includes a custom-tailored security plan with no long-term commitments. Together, we can create a plan to keep you, your most valuable possessions, and your loved ones as safe and secure as possible!