Understanding Alarm System Contracts

When you purchase an alarm system and sign up for alarm system monitoring with a home alarm company the process often requires that you sign a contract. The length of these alarm system contracts will differ based on a number of factors such as length or price incentives. Understanding alarm system contracts, why they exist, and what they mean can be difficult for some consumers to comprehend, so we’ll lay it down for you.

First, let’s talk about why alarm system contracts exist. Alarm system monitoring is not an intangible service. It requires equipment, and sometimes requires a technician or installer – although DIY alarm systems have somewhat taken over the industry. With that being said there is obviously a cost for that equipment. In order to make home alarm systems affordable home alarm companies give customers a large discount on the equipment price for signing an alarm system monitoring contract. This way the customer can get the often expensive equipment at a discount and pay little up-front.

What if you don’t want to sign an alarm system contract? Well that’s just fine, and that’s your choice. However, be prepared to pay a lot more for the alarm system equipment than you would when you do sign an alarm system contract. Also keep in mind that many home alarm companies do not use proprietary equipment, meaning you can use the equipment with another company or as a standalone alarm system later.

There are several different contract lengths offered with alarm system contracts, the most common are one, two, three, and four year contracts. With a one or two year contract you’ll likely get less of a discount off the alarm system equipment, if any discount at all. With a three or four year alarm system contract you’ll normally receive a hefty discount off of the up-front equipment cost.

In simple terms, you’re basically getting a discount off of the equipment cost by signing up for alarm monitoring. Many alarm companies don’t offer equipment sales on their own and require monitoring, as that’s the main service offering. Most alarm companies aren’t in the business of selling equipment, but providing monitoring. They purchase the equipment and resell it to the customer and monitor that system. When the contract is up, you can either renew it or use the equipment another way – the alarm company will rarely ask for the equipment back because it is purchased and not rented.

Alarm system contracts can be confusing if you don’t understand their purpose. It’s also important to read your alarm system contract before signing up with an alarm company to make sure you’re aware of what service is being provided and any other stipulations the contract may enforce.