Does Having a Car Alarm Lower Insurance Rates?

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Mar 13, 2020

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A car alarm makes it harder to steal your vehicle. But does having a car alarm lower insurance rates?

Today, we’re explaining everything you need to know about the connection between car alarms and insurance rates, including the discounts you can expect from having a car alarm.

does having a car alarm lower insurance rates?

Yes, Most Insurance Companies Offer Discounts for Car Alarms

An older car without a car alarm is more likely to be stolen than a newer car with a car alarm – for obvious reasons.

That’s why most major insurance companies offer a discount for vehicles with car alarms. The majority of car insurance providers in the United States offer discounts specifically for car alarms or vehicle security systems.

Of course, not all car insurance companies offer this same car insurance discount. We recommend shopping around to make sure you get the best price for your unique needs.

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You Only Get a Discount on Comprehensive Coverage

Remember that car alarm insurance discounts only apply to your comprehensive coverage – the part of your car insurance that covers car theft, break-ins, and other non-accident-related damages.

Comprehensive coverage is optional in all states. If you don’t have comprehensive coverage, then you will not be covered for car theft or break-ins.

Home insurance covers any possessions inside your vehicle. If your possessions are stolen during a vehicle break-in, then you make a claim through your homeowner’s or renter’s insurance – not through your car insurance. For that reason, you may get a small discount on home insurance by getting a car alarm system.

How Much Of a Discount Can You Get for a Car Alarm?

You can expect to receive a discount of anywhere between 2% and 10% for having a car alarm or vehicle security system.

That could mean saving about $20 to $50 per year off the average car insurance policy (remember, the discount only applies to your comprehensive coverage and not to your policy as a whole).

Of course, discounts vary widely between car insurance companies. Some car insurance companies offer particularly steep discounts for car alarms, for example, while others offer no discounts whatsoever.

Types of Car Alarms and Vehicle Security Systems

When you say “car alarm,” you might think of the loud alarm that goes off when someone hits your vehicle or smashes a windshield. However, this is just one type of car alarm.

Depending on your type of car alarm, you may be eligible for different insurance discounts. Types of car alarms and vehicle security systems include all of the following:

Passive Car Alarms

A passive car alarm is the type that comes standard on most new vehicles. This car alarm is what most people think of when they hear “car alarm”. It’s a passive car alarm because the driver does not need to activate it: it activates automatically when you lock your car. When you press the lock button on your key fob and walk away, the car alarm is automatically activated.

Active Car Alarms

Active car alarms need to be actively armed by the driver. Otherwise, active alarms work in a similar way to passive alarms: the alarm is sounded when the vehicle detects an intruder. Some vehicles have a separate ‘alarm’ button on the key fob that you press to activate the alarm system, for example.

Silent Car Alarms

Silent car alarms can be found on certain newer vehicles. A silent car alarm is triggered by a break-in or similar event, but it activates silently. Some silent alarms send a notification to the car owner’s phone, for example, to confirm that it’s a real break-in and not an accidental one. Other silent alarms call the owner. The main downside, of course, is that the alarm doesn’t alert people in the vicinity, and it may not scare the thief away.

Advanced Vehicle Security Systems Like OnStar

Newer vehicles have OnStar and other advanced vehicle security systems. These systems can detect a break-in or vehicle theft. They can also shut down the vehicle remotely to aid law enforcement.

Some of the above car alarms are factory car alarms. They’re installed on your vehicle from day one.

Other car alarms are aftermarket alarms. You may install an aftermarket alarm on an older vehicle, for example, to qualify for a car insurance discount and protect your vehicle.

As far as we know, car insurance companies do not provide specific insurance discounts for active, passive, or silent car alarms. As long as your vehicle has an effective security system in place, it should qualify for a car alarm insurance discount.

However, some car insurance companies may provide steeper discounts for advanced OnStar-style security systems.

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Final Word

Car alarms and vehicle security systems reduce the chances that your vehicle will be stolen or broken into. They’re not bulletproof, but they are a proven way to reduce your risk.

Most car insurance companies provide a small discount for having a car alarm. However, this discount will only apply to your comprehensive coverage. You can expect to receive a car insurance discount of about $20 to $50 per year for having a car alarm.

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