Understanding Security System Contracts—Looking at the Fine Print

This post was updated on January 31, 2020 with new product information.

Most of us put all our time and energy into finding the right home security system available—with the contract being an afterthought. Before you sign on the dotted line, however, make sure you thoroughly read and understand your new home security system 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. 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: a longer initial term should mean a 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 the 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 upfront so that you can easily change companies later. Also, choose a company that 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. Ask for that in writing.

We worked very hard to make the Frontpoint monitoring agreement as balanced and easy to understand as possible. Here are a few highlights:

• Installation fee: $0. Our DIY installation is fast, easy, and costs you nothing!
• Price lock: Yes. Sometimes rates go up, but not with us. We lock in your price when you sign a contract.
• Z-Wave compatibility: Yes. While it faster and easier to connect with Frontpoint devices, as a DIY system you can connect to other Z-Wave compatible devices to make the most of smart home automation.
• Contract length: Month-to-month. We offer month-to-month contracts—no locking you in for multiple years!
• Risk-free trial. Starting from the day you receive your system, you have 30 days to test out the Frontpoint system. If you aren’t satisfied, we will provide a complete refund.

Here’s a comparison chart you can use as a guide while you’re shopping around:

Frontpoint keeps homes safe whether families are there or not. We've been revolutionizing the home security industry for over a decade. And we're just getting started. To shop DIY home security systems, check out our Security Packages. If you have questions or would like to discuss a quote, contact us at 1-877-602-5276.