Secure and Insure

Save or Secure?
When people are shopping for professionally monitored systems, the primary concern is how effective the security system is and what level of security can be provided. The discount on insurance premiums is a minor incentive for these people. “For a system that costs about US$400 to $600 per year for the monitoring and $900 to $3,000 for the system itself, a discount in the order of the tens of dollars ($30 to $200) is no incentive,” said Matia Grossi, Research Manager for EMEA Physical Security, Frost & Sullivan.

However, while many homeowners are more concerned about keeping their loved ones and assets safe than saving on premiums, discounts are still an added benefit, Martorello said.

When the recession hit about two years ago, the security industry saw a dip in growth. “However, regardless of the economy or world events, crime does not stop or take a break,” Martorello said. “For residential customers, a sense of security was missing and there is a mindset to feel safer. We actually saw an increased demand from residential customers for traditional systems.”

In the U.K., however, crime statistics dropped, including burglary. Several sectors significantly reduced their budgets for security as the recession continues. “Most security solutions act as deterrents to criminals. Although this makes them invaluable for the protection of a property, it also means that it is not always possible to quantify how many criminals have been discouraged from burgling a property after seeing what security produc t s have be en ins a l l ed. Unfortunately, in times of economic uncertainty, not being able to put a definite figure on the number of attacks deterred means homeowners can fail to recognize the real value of protecting their homes, and as a result security spending will suffer,” Newbury said.

Choice
When looking for security providers, homeowners often follow the footsteps of family, friends or neighbors. It is imperative buyers know in advance what kind of service and security they should expect. “Working with insurance companies and brokers, potential customers can have proper recommendations from a trusted source,” Newbury said. For security consultants, partnering with insurance companies has the benefit of potential recommendations, Martorello said.

However, insurance companies tend to not recommend brands of equipment, since neither the vendors nor technology used is their area of expertise. “Generally an insurer will give a guideline on the areas of protection required, leaving the final specification to the supplier; but membership and registration with recognized associations like the BSIA or supervisory organizations such as the National Security Inspectorate or the Security Systems and Alarms Inspection Board are almost always required,” Newbury said.

The finished system often includes equipment from several manufacturers. “Installers and manufacturers work with insurers to ensure that they only specify graded equipment and help them with materials about alarm component specifications and usage details,” Makosinski said.

More insurance companies require homeowners to install alarm systems before they are covered. “An insurer may be more likely to decline the risk without a properly installed and maintained alarm system,” Makosinski said. Martorello added “more insurance companies are beginning to require homes and businesses to install security systems before the policy is written.”

Upgrading existing security systems to use new technologies may not affect insurance rates. “We encourage our policyholders to let their conscience determine what level of security they feel they need,” Northey said. “As new technology becomes more prevalent, we will consider the impact those changes have to our customers and our overall loss characteristics. This will determine whether or not changes are needed to our current policies. We offer no additional discounts based on differing technologies at this time.”

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