Security System Monitoring Contracts

All companies that monitor alarm systems require you to sign a monitoring contract. If a company does not require you to sign a contract, they have no liability or errors and omissions insurance and should be avoided. There are several aspects of the contract to be aware of:

Term of the contract:

  • Month to month
  • Annual
  • Multi-year

Renewal term of contract:

  • Month to month
  • Annual
  • Multi-year

Monitoring payments:

  • Monthly
  • Quarterly
  • Semi-annually
  • Annually

Most alarm monitoring contracts can only be canceled with notice 30-60 days prior to the renewal date of the contract. This is fairly well enforced by the alarm companies. If you decide to cancel your monitoring because you are moving, having financial troubles or even die, you will be responsible for the “balance of contract”payments. This means that the company will expect you to pay the full amount (monthly fee X remaining months) left on the contract, regardless of whether you are using the service or not.  Some companies will allow you out of the contract if you can get the new owner to sign up for the monitoring service or if you transfer your monitoring service to a new location.

These contracts are enforced because alarm companies use these contracts as collateral to borrow money, establish credit and even sell and buy contracts (similar to banks selling mortgages.)

Again, there are no good or bad contract terms. What is important is that you understand what the options are so that you can make the decision that will best suit your needs.

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