Burglar alarms: you turn your back and the discounts have gone

Tighten home security if you need to, writes Julian Knight. Just don't assume your premiums will fall
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Time was when it was worth the expense of buying and installing a burglar alarm, if only for the juicy discount handed out by home contents insurers. But now, according to research from Tesco Compare, this incentive has all but dried up for many homeowners.

"Alarms aren't the deterrent they once were," says Ian Crowder at AA Insurance Services.

"They go off at all hours and people just seem to ignore them. I know of instances where burglars will set the alarms off deliberately, stand back and wait to see if anyone comes. And when they don't, they go ahead."

Instead of giving automatic discounts for burglar alarms, Mr Crowder says his firm looks at household security as a whole, including the strength of window and door locks. And Malcolm Tarling at the Association of British Insurers explains that instead of giving 10 per cent off to every policyholder with an alarm fitted, insurers take a case- by-case approach.

"Sometimes when there are lots of valuable items in the house or it is in a high crime, often urban, area, it will be a precondition of obtaining insurance that an alarm is fitted – there won't be discounts," says Mr Tarling.

"Insurers will only offer them according to their previous claims experience," he adds. "If they don't think it will make much difference in your area then no discount will be on offer. The best advice is to check with your insurer what reduction in the premium you can get before going to the expense of having a burglar alarm installed."

Even when discounts are forthcoming, they aren't big. Tesco Compare's research shows that of the five providers that would give policyholders an incentive for having an alarm, Kwik- Fit, Swinton, Cover Direct and Prudential knock off only between 2 and 5 per cent. Meanwhile, the financial-advice website MoneySavingExpert.com reckons the best discount available is around 7.5 per cent.

The site points out that there are other ways of getting a bigger reduction, like building up a history of no claims or even being older, as this group tend to be at home more and, statistics show, file fewer claims.

Mr Tarling adds: "Accepting a higher excess, joining the local neighbourhood watch or even working from home bring discounts. Most people don't realise that burglaries tend to happen in the afternoon when people are at work, rather than at night."

Any discount for having an alarm can look very limp set against purchase and running costs. For a wireless alarm – which is harder to tamper with and easier to install than a traditional wired model – expect to pay £400 to £600. Installation by a qualified engineer, approved by industry body the National Security Inspectorate (NSI), is usually included in the upfront cost.

If you want the alarm to be linked to a police station and serviced, then expect to pay a fee of £15 to £25 a month. Julian Stanton, NSI spokesman, recommends that people get at least three quotes and seek the advice of their local police crime reduction officer before choosing a system.

Units can be purchased uninstalled to save money but those tempted by the idea of DIY alarms should be aware that their handiwork may not be recognised by their insurance firm – so, again, no discount.

One further note of caution: if you receive a discount for having a professionally installed alarm system but can't provide documentary proof, then you could have a future insurance claim reduced or disallowed altogether.

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