What is an Anti-Theft Discount? (Car Insurance Discounts for Alarms & Security Systems)

Anti-Theft Discounts reduce comprehensive car insurance rates for vehicles with anti-theft systems. Anti-theft car insurance discounts may reduce comprehensive rates by up to $26.50/month.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Apr 5, 2021

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Here's what you need to know...

  • All insurance companies give at least a small number of discounts on policies that meet eligibility requirements
  • When an insurance company offers a specific discount, every driver who qualifies must receive the savings
  • One popular vehicle discount offered by insurers is the anti-theft discount
  • There are three different types of anti-theft discounts for active, passive, and tracking systems
  • Active alarms offer the smallest savings and tracking systems offer the biggest discount

Auto insurance companies offer discounts to make their personal auto insurance rates a bit more competitive to certain applicants.

While your base rate might already seem fair, you’ll never hear someone complain because they qualify for too many discounts that lower their rates even more. The more discounts that you receive, the better.

One discount that you should look for when you’re committed to securing your vehicles with alarm systems is the Anti-Theft Discount.

The Anti-Theft discount will be applied to portions of your premiums and can help to keep the cost of insurance down on multiple vehicles in your household at one given time. An example of this is the LoJack discount.

These anti-theft devices and discounts are even more important if you live in one of the states with the highest vehicle theft rates. The number of thefts in your area can increase your insurance rates, even if you haven’t been a victim of theft.

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What Are the Different Types of Anti-theft Discounts?

With most auto insurance discounts that you’ll find on your auto policy, the discount is a fixed percentage. As long as you qualify, the fixed percentage is deducted from your total premiums or the premiums for some of your coverage options.

It’s a bit more complicated when it comes to Anti-Theft Discounts because there are multiple types.

Before you assume that you’re going to save hundreds of dollars every year if you install an alarm in your car, you have to see what the modification is really going to do to your premiums.

You should never install an alarm strictly because you think you’ll save on insurance, you should install one because it will protect your car. Here are the different types of alarm discounts that are available:

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What Is a Passive Alarm Discount?

Alarms are meant to give you peace of mind. The passive system is better able to do that because it will automatically activate once you take the keys out of the ignition and you close all of the vehicle doors.

With passive alarms, you don’t have to worry about whether or not you turned the alarm on if you were in a rush. This is why passive alarm discounts are larger than active ones.

What Is an Active Alarm Discount?

The most inexpensive alarm system that you can purchase in local auto stores is an active-type of alarm. With this type of system, you have to press a button to activate the alarm every time to exit the vehicle.

If you don’t actively set the alarm, the vehicle isn’t protected. This is why the active alarm discount is small.

What Is a Sound Only Alarm Discount?

As if choosing between an active and a passive alarm isn’t enough, you also have to decide if you’d like a sounding alarm or an engine disabling one.

A car alarm that sounds is meant to scare off car thieves by notifying everyone around that someone has tried to access the car while it was armed. Since it only sounds to deter theft, sound-only alarm discounts can be small.

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What Is an Engine Disabling Alarm Discount?

The largest auto anti-theft discount is applied for cars with a passive engine-disabling alarm.

The passive part means that the alarm activates itself and the engine-disabling feature means that the alarm is programmed into the car’s computer system so that it will disable the ignition or the engine when the alarm is sounding.

If someone sets off the alarm, they won’t be able to drive the car away. Discounts for these alarms are larger.

What Is a Tracking or Recovery System Discount?

While a vehicle recovery system isn’t necessarily an alarm that deters theft, it is a system that helps the vehicle owner find where their car is if it is successfully stolen. Many companies offer a Vehicle Recovery System Insurance Discount.

While it seems odd to give an anti-theft discount for a system that doesn’t deter theft, insurance companies do reward people for ensuring that owners can locate their vehicles.

LoJack and OnStar vehicle recovery systems have to be installed and activated, but the owner also has to pay for a subscription for ongoing tracking.

The subscriptions are paid annually, so as long as you can show your subscription is active, you’ll be eligible for the largest Anti-Theft Discount.

Which Insurance Companies Offer Anti-theft Discounts?

The following car insurance companies are confirmed to offer an anti-theft discount:

  • 21st Century
  • AAA
  • Allstate
  • American Family
  • Ameriprise
  • Amica
  • Country Financial
  • Esurance
  • Farmers
  • Geico
  • Liberty Mutual
  • MetLife
  • Nationwide
  • Progressive
  • Safe Auto
  • Safeco
  • State Farm
  • The General
  • The Hanover
  • The Hartford
  • Travelers
  • USAA

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How Much Will you Save with an Anti-theft Car Insurance Discount?

Every company rewards their customers differently. Some carriers might really see the benefit of installing an anti-theft system and others might think that the systems don’t do much good.

Statistics show that more than 721,000 cars were stolen in a single year and that costs insurers a lot of money. Giving nominal discounts makes a lot more sense than not encouraging people to install alarms in their car.

Most insurers give discounts because the number of auto thefts has gone down by 7.2 percent. The savings for a passive alarm will range between 15 percent and 20 percent with most insurance companies.

Active alarm discounts might only be between 5 percent and 10 percent. If you have a LoJack system, you could combine a 25 percent discount with your other anti-theft discount and save even more.

Where Is the Anti-Theft Insurance Discount Applied?

You’re not going to save 25 percent off of your total premium just for installing a vehicle recovery system.

It’d be nice if that was the case, but unfortunately, Anti-Theft discounts are some of the few discounts that are only applied to premiums for specific coverage options.

Since the only risk that alarm systems really mitigate is the risk of your vehicle being stolen, the discount will come off of the vehicle’s comprehensive premium. Comprehensive pays for vandalism and also vehicle theft claims.

No other premium will be affected by having an anti-theft device. This is why you shouldn’t install the device just for savings, especially if you’re not carrying full coverage.

How Much Could I Save with a Passive Disabling Device?

Check your insurance policy first to see if you already have an anti-theft discount. If you don’t, you should ask your insurer for a quote to see how much you save.

When you do this, it’s best that you also check to see how much other insurers will charge you for the same coverage with the same discounts.

Use an online insurance quoting tool and get to comparison shopping. In fact, you can use our FREE quote tool to compare several insurance rates right now!

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Are There Insurance Discounts for Security Systems?

A car alarm insurance discount may reduce comprehensive car insurance rates by $10.60/mo. Passive, active, and silent security systems affect car alarm insurance discount rates.

  • A car alarm will most likely get you a discount on your car insurance premiums
  • There are several types of car alarms available
  • Advancements in technology have enabled vehicles to be more secure than ever
  • Car alarm insurance discounts can reduce comprehensive rates anywhere between 2% and 10%

Having a security system in a car does affect a person’s car insurance rates. One example is the anti-theft car insurance discount.

The majority of car insurance providers offer a discount for cars that have a security system.

Car security systems have a history almost as long as the automobile itself. Over the last few years, the security alarms available in cars have progressed beyond what most people thought possible just a few decades ago.

To compare car insurance companies that offer car security discounts, visit the A.M. Best Company website.

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What Are the Most Common Kinds of Car Security Systems?

According to the Auto Tips & Advice website, there are some basic types of car security systems. These systems are:

  • Passive car alarms – This is the type of car alarm with which most people are the most familiar. It’s called “passive” because the driver does not need to activate it.
    • It comes standard on most new cars.
    • This type of system is armed automatically when the driver locks the car. It involves the automatic locks button on a key fob, so when the driver hits the lock button on their key fob, their car’s alarm is automatically turned on.
  • Active car alarms – An active car alarm works much in the same way as the passive car alarm except the driver has to physically arm the alarm themselves.
    • Often with this type of car alarm, there is a separate button on the driver’s key fob that they have to press to arm the car’s alarm system.
  • Silent car alarms – Since car alarms that make sounds (like the passive and active alarms) can be so disrupting and can often be triggered by innocuous situations that have nothing to do with theft, car manufacturers started producing silent car alarms.
    • The way a silent car alarm works is the alarm sends a signal to a device that the car owner keeps, most likely in their home. With some silent alarms, when the device is triggered it will actually call the driver on their phone.
    • The main downside to this type of car alarm is that often with a non-silent car alarm, the noise will scare the car thief away before they actually steal something. At the very least, a non-silent alarm will alert other people in the vicinity that there is something going on.

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What Is the Difference Between a Factory Car Alarm and an Aftermarket Car Alarm?

A factory alarm is the car alarm that is installed inside the car while it is being manufactured. This type of alarm is most often a passive car alarm. While these car alarms tend to come as standard features on most new cars made today, some people prefer to have them removed.

The people that have factory alarms removed tend to like to replace them with a more customized form of a car alarm.

An aftermarket car alarm is a name for any car alarm that is purchased separately from the car itself and installed after the car is manufactured.

So, any custom alarm system that is not installed by the car’s manufacturer is considered to be an aftermarket car alarm.

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What Is the Future of Car Alarms?

Over the past decade or so there have been amazing advancements made in the world of car security. One of the most recognizable is the OnStar system. OnStar combines advancements in both car security and communication technology.

Unlike a normal car alarm that performs just one function, an OnStar system does many things. OnStar works as a navigation system, a hands-free calling device, and a diagnostics system, as well as a top security feature.

If a car with an OnStar system is stolen, all that the driver has to do is call OnStar and the company can track the car by its GPS.

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  1. https://www.nationwide.com/anti-theft-discount.jsp
  2. https://docs.google.com/spreadsheets/d/1CdRhDJEXQQKHU6ueWizprhDf7G0ukKiLi_R_AXL_t0c/edit#gid=0
  3. https://www.dedona.com/differences-between-passive-active-alarm-systems/
  4. https://www.lojack.com/
  5. https://www.onstar.com/us/en/home.html
  6. https://www.allstate.com/tools-and-resources/car-insurance/what-is-comprehensive-auto-insurance.aspx

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