CSAA, insurance industry to cooperate on standards

Monday, March 1, 2004

VIENNA, Va. - In an effort to educate the public and the insurance industry, the Central Station Alarm Association is planning to meet with some of the largest property and casualty insurance companies in New York this summer.

The meeting came about because insurance is a tough business, and insurers are starting to realize that they don’t have all the facts about alarm systems, said Steve Doyle, CSAA executive vice president.

“The insurance industry doesn’t know enough about these systems, and they’ve gotten smart now,” Doyle said. “They’ve said, ‘Our people don’t understand these systems, they don’t know what to look for, and they don’t know what to ask for.’ So we’re going back and regenerating the burg books and the fire books and now we have their attention, whereas we didn’t a few years ago.”

One of the reasons necessitating this meeting, Doyle said, has been the propensity of do-it-yourself and low-level systems homeowners and businesses are claiming on their insurance policies.

“You can extrapolate that to commercial accounts out there where the commercial account says, ‘Hey, the insurance company says I’ve got to have an alarm system, so I went down to the hardware store and bought a Black & Decker $9.95 special and put it in myself,’” Doyle said. “They tick it off on the insurance form so they get a 10 percent discount or whatever it happens to be.”

This, he said, creates a potential for serious losses within the industry.

“[The insurance industry is] starting to realize that they need to know if that fire system that was put in a building was made in Ulan Bator or something and it isn’t going to work. They understand the exposure out there,” Doyle said. “You get a commercial building out there that has a system in it that doesn’t meet codes and standards and all the rest of that, they’re open for not only a big loss, but liability.”

By working with the insurance industry, Doyle said the CSAA hopes to increase the overall quality of systems and services that are being installed in the security industry.

“We’re taking a look at it and trying to refocus the industry on putting in viable systems that meet codes and standards and UL specs where that’s appropriate and get away from this trend of sub-standard systems,” he said. “Somehow, we need to get back to educating the public aobut what are true systems and if you decide you want the cheapest tires on the road out there, when you get a blowout, you’re going to have to expect it.”

Another benefit CSAA hopes to gain through this cooperation is elevation of standards as a whole, Doyle said.

“We’re going to be looking at the insurance industry to have a little more stringent requirements and we think there’s a lot of things in the codes and standards area where we think we have to elevate the standards in this industry,” he said. “Unfortunately, some won’t like that. There are always those who want the lowest common denominator, but we’re in the business of life safety. I know most of the members of this association take that very seriously.”

Our big issue with APCO is going to be working on what they call Project 36 (CAD to CAD interface)