Just to confirm that we are talking about the loss of water alarm and not the engine temp alarm that has a sensor on the engine block.  
I have both and they work fine - the water loss one it is the type that goes into the top radiator hose.  When I first installed it, it worked as advertised - a SHORT beep on ignition on then all quiet.  A little later it went off - as part of the installation the coolant was changed and when the air locked in the system made its way to the radiator and was vented out the water level dropped accordingly and the alarm sounded - topped up the radiator and all is good.  Where the sensor is in the top hose does allow the water to drop a little before sounding which is good.
The environment in the overflow tank means that the coolant level goes up and down and in my view can cause false readings - that is why I put mine in the radiator hose so that there is a bit of a buffer - failing that if I was you I would go back to putting the sensor in the radiator.
Garry
				
			 
			
		 
			
				
			
			
				REMLR 243
2007 Range Rover Sport TDV6
1977 FC 101 
1976 Jaguar XJ12C
1973 Haflinger AP700
1971 Jaguar V12 E-Type Series 3 Roadster
1957 Series 1 88"
1957 Series 1 88" Station Wagon
			
			
		 
	
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