New alarm technology brings old problems for insurers

Car theft years ago involved screwdrivers; some wire, noise and broken glass, with a fair chance of being noticed and caught. Improvements in vehicle security technology have made stealing a bunch of keys the only certain way of stealing a car and getting away without being noticed.

Resourceful modern car thieves having new skills, such as ‘fishing' through letterboxes and joining sports clubs to break into sports-lockers etc. There seems to be little to criticise here, as if the car is stolen in this way, the insurer pays-up.

For security systems protecting business premises though, where much greater values are involved, improvements in security technology is now somewhat less benign, and it could be that some brokers haven't quite realised that yet.

Many of you will remember when the (then) latest alarm technology caused a mechanical key to be used to (un)set alarm systems. There then followed massive problems when keys were lost, with the risk of duplicate keys being cut and, of course, thefts.

Alarm technology then progressed to develop the 4-digit keypad and, not surprisingly, serious alarms systems all had to have such a keypad. Unlike the old mechanical key system, the door key was separated from the alarm ‘key' [memorised] so stealing a set of keys no longer meant a successful theft.

To help the police, and address the problem of forgotten codes, alarm technology experts then set off to develop something that was even better – the Keyfob. Since 1 October 2001, this has been an essential part of any new alarm system.

The Keyfob has an electronic ‘handshake' rather than mechanical, and it doesn't go in a keyhole, but for the thrust of this letter, it is exactly the same as an old-fashioned key, with the slight advantage that they can be disabled if stolen or an employee leaves.

It does, however still leave a fundamental problem for anyone looking for their keys in the morning, after their car, business keys + Keyfob have been ‘fished' through the letterbox the night before; their car stolen and their business burgled.

So, how did we get back to the previously discredited ‘key' to unset burglar alarm systems? We were concerned about all of this last July, and took it up with Anthony Weeks, the Technical Manager of the National Security Inspectorate (NSI). I was told they had consulted the Association of British Insurers (ABI) and the Association of Burglary Insurance Surveyors (ABIS).

Between them they must have decided the social and money cost of police time attending false alarms when a keyholder forgot his 4-digit code, was greater than the increased temptation for thieves to steal sets of keys and robbing business premises.

However, unlike the car stolen in the same way, this time the insurer won't pay-up.

This just doesn't seem to be well thought out, or socially acceptable, but even if it was, as you will see below, it looks like the new system won't actually reduce the number of false alarms either, as the NSI overlooked the self-preservation instincts of business owners.

So, it seems to us that the latest technology will progressively lead to an escalation in ‘fishing' for keys; more uninsured thefts and the possibility of more wasted police time on false alarms: a pretty good result then all round.

I wonder if the next Code will outlaw Keyfobs and bring back keypads, probably with a false-alarm call out charge to the police.

Colin Lees, managing director, Lymm Insurance Brokers