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Hardwired Vs. Wireless Home Alarm Systems:
Alarm Devices Explained!

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Phone Jack (For Line Seizure).
Circuit Board
(The "brain" of your alarm system).
Back Up Battery
Keypad
(Installed separately from control panel).
Siren
(Installed separately from control panel and keypad).
Your control panel (left) holds your circuit board and back up battery, with the line seizure jack usually installed nearby.  The control panel is usually installed in your basement or a hidden area.
We receive many questions about the merits of wireless vs. hardwired home alarm systems.  As you may have read on other areas of this site, we definitely recommend using hard wired alarm components wherever possible.  You should also know that some of the "all in one" wireless alarm packages can easily be defeated by even a novice burglar.  To understand why, let's first take a look at how a standard hardwired alarm system is set up:
Many people think of the keypad as the "brain" of their alarm system.  But it merely sends orders to the circuit board inside your control panel, which is usually installed in your basement (or above a drop ceiling, for example).  Ripping the keypad off the wall will not prevent the system from going into alarm, nor will it prevent the alarm from sending its signal. The control panel also stores the back up battery, ensuring your alarm functions during a power failure (average 4-6 hours).

Your alarm's special phone jack can usually be found near the demarcation point of your phone line (where your phone line first physically enters your home).  This phone jack enables your alarm to "seize" the phone line to send its signal to the monitoring center.  So if a burglar takes the phone off the hook, your alarm will still be able to communicate with the outside world.
Another benefit of a regular hardwired system is that you can install your siren in a concealed area, away from the control panel and keypad.  This prevents tampering by a would-be burglar.
Now, Let's Have A Look At How The "All In One" Wireless Units Work:
"All In One" Units
These wireless alarm devices combine your keypad, circuit board, back up battery, and siren in one unit.
"All in one" wireless home alarms combine your circuit board, keypad, back up battery and siren all in one "convenient" package.  These types of wireless alarm systems have grown in popularity over the last five years or so, but not because they're superior. Many of the "free" alarm companies will only offer this type of unit because they can be installed very quickly and cheaply. 
Now here's the problem: It's possible that a burglar could completely disable this unit before it has time to send its signal.  Now, if this were a regular hardwired keypad, it wouldn't matter.  The signal would be sent through the control panel down in your basement or otherwise inaccessible area.  But when a burglar disables this unit, it disables everything: your circuit board, wireless receiver, dialer, keypad, back up battery, and even the siren!   These "all in one" units can be extremely vulnerable and give you a false sense of security. 
But What If I Have To Use Wireless, Because Of My Home's Construction?
Your home may have a completely finished basement with plaster ceilings.  Or, you may live in a much older house that uses plaster walls.  In these cases, you have no choice but to go wireless.  But you can avoid using an "all in one" unit by simply adding a wireless receiver to a regular alarm system.  This receiver would usually be installed, safe and sound, with your control panel to communicate with your wireless devices (motion sensors, door contacts, etc).  Home alarms that use both hardwired and wireless devices are known as "hybrid" systems.
Wireless Receiver
A wireless receiver like this one can easily be added to your hardwired alarm system.
Is There Any Situation In Which An "All In One" Unit Is Acceptable?
If you rent and/or live in an apartment or condo, these units are borderline acceptable.  This is because your landlord probably won't want you installing an alarm and drilling holes in his walls. But by all means, ask him/her for permission to do so.  If you can't get permission, then an "all in one" unit would have to be used.  After all, we would rather see you obtain some security rather than none at all.

See this page for types of alarms that match your living conditions:  What type of alarm system should I use?

See this page for more information about "free" systems:  Secrets of the "free" alarm system.
secrets of the free home alarm system