Will A Car Alarm Lower My Insurance Premium?

By Scottie McNelly

Yes it can, but maybe not as much as you might expect. A car alarm is a theft deterrent. And in some cases will prevent vandalism. These are perils that are covered under the Comprehensive or Other Than Collision Coverage of your automobile insurance policy. Having a car alarm will lower the part of your insurance policy designed to cover you for theft. If you do not carry this type of coverage, then you will not receive a discount. And if you do carry this coverage, the discount is applied to only the cost of that particular coverage.

Auto Insurance Policy Coverages		Cost
Liability Bodily Injury	$100,000 per person	$78.00
Liability Bodily Injury	$300,000 per accident	$120.00
Personal Injury Protection	$5,000 per person	$33.00
Collision	$500 deductible	$129.00
Comprehensive	$500 deductible	$60.00
YOUR TOTAL PREMIUM		$420.00

As you can see, Comprehensive coverage is one of the least expensive parts of the policy premium. When the car dealer or alarm sales person tells you that you are entitled to a 10% discount for having an alarm, you think and often times the sales person believes, that the discount is off the entire premium. That is not true. The discount is only off the coverage on your policy that is effected by theft or vandalism. Instead of getting 10% off the total $420, it is only 10% off the $60 amount. And in cases when you do not carry Comprehensive coverage, there is no discount. The same rating rule applies to cars with airbags or automatic seat belts. The discount only applies to the coverage on your policy that covers injury to a person protected by an air bag or automatic seat belt.

Only your licensed agent is commissioned by your state to advise you regarding insurance rates. Don’t count on someone who is not a licensed agent to advise you on prices, discounts and coverage’s. Licensed agents have ongoing training to stay informed on the insurance laws, prices, discounts and coverage’s.