UPDATE 5/25/2023: Hyundai and Kia have announced that they settled a class action lawsuit over theft-related losses. You can find the latest information about the proposed settlement here. The original story continues as published below:
If you own a vehicle from two manufacturers, you may not be able to have it insured by some major companies, a social media post claims.
“Major car insurance companies plan to drop Hyundai and Kia from their plans due to thefts!” the poster claimed in a viral tweet on Jan. 30.
Have some car insurance companies stopped covering Hyundai and Kia models due to thefts?
Yes, some car insurance companies have stopped covering Hyundai and Kia models due to thefts. The change applies to new policies, not those for existing customers.
WHAT WE FOUND
Progressive and State Farm are not issuing new policies in some areas for certain Hyundai and Kia vehicles due to an uptick in thefts involving the cars.
Both insurance companies say they will continue to insure existing customers who own these types of vehicles.
Scott Holeman, a spokesperson for the Insurance Information Institute (III), also confirmed the institute is only seeing the suspension of new customer applications in some states, not the dropping of existing customers.
The insurance companies did not provide a list of vehicles that they will not insure right now. But a spokesperson for Kia said the impacted models include “2011 to 2021 Kia vehicles equipped with a steel ignition key for turn-to-start operation.”
Hyundai didn’t provide information about impacted models, but a spokesperson said in a statement that the company “regrets this decision by insurers and its impact on select Hyundai vehicle owners and lessees.”
The car manufacturers and insurance companies didn’t confirm which cities or states are impacted by the change, either. But two State Farm employees told VERIFY partner station WWL-TV that the company’s restrictions apply in Georgia, Louisiana, Oregon, Washington and Pennsylvania.
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State Farm has “temporarily stopped accepting new customer applications in some states for certain model years and trim levels of Hyundai and Kia vehicles because theft losses for these vehicles have increased dramatically,” a spokesperson said.
“We take seriously our responsibility to manage risk and the impact of excess claim costs on all our customers,” the spokesperson said. “In this case, it became necessary to take action to protect our policyholders and our business.”
In some geographic areas, Progressive has also limited the sale of new insurance policies on some Hyundai and Kia models as a result of thefts, according to a spokesperson.
“During the past year we’ve seen theft rates for certain Hyundai and Kia vehicles more than triple and in some markets these vehicles are almost 20 times more likely to be stolen than other vehicles,” the spokesperson said. “Given that we price our policies based on the level of risk they represent, this explosive increase in thefts in many cases makes these vehicles extremely challenging for us to insure.”
There is at least one other major insurance company that is not taking the same steps as Progressive and State Farm.
Nationwide told VERIFY it “has been monitoring recent Hyundai and Kia theft trends and responses by those vehicle manufacturers,” but the company continues to provide insurance protection for them.
Other major insurance companies, including Allstate, Liberty Mutual, Geico and USAA, did not respond to requests for comment about whether they will continue to insure Hyundai and Kia vehicles.
Why Hyundai and Kia thefts are on the rise
Hyundai and Kia thefts “increased dramatically” throughout the country in 2022 due in part to “misuse of social media platforms” such as YouTube, the National Insurance Crime Bureau (NICB) wrote in a January 2023 press release.
The NICB and other insurance industry associations sent a joint letter to YouTube’s Chief Executive Officer Susan Wojcicki asking the platform to “remove ‘how to’ videos that provide detailed instructions for stealing” Hyundai and Kia vehicles, according to the press release.
But the rise in Hyundai and Kia thefts began before 2022.
Theft insurance claims among 2015-2019 model-year vehicles were nearly twice as common for Hyundai and Kia vehicles than those from all other manufacturers, according to an analysis of 2021 insurance claims from the Highway Loss Data Institute (HLDI).
It’s likely that the vehicles are stolen more frequently than others because they do not have electronic immobilizers. This is a device that “arms automatically when a vehicle is switched off and prevents unauthorized moving or starting,” Holeman said.
The City of Seattle is also suing Kia and Hyundai over allegations that failures to install anti-theft technology in some vehicles contributed to an exponential rise in thefts, VERIFY partner station KING 5 reported in January 2023.
From 2021 to 2022, thefts of Kia and Hyundai cars increased by 363% and 503%, respectively, according to the city.
Hyundai said in its statement that engine immobilizers are standard on all vehicles produced as of November 2021 and “have long been standard equipment on all Hyundai vehicles with push-button ignitions.”
The manufacturer also said it has “taken a series of actions to reduce the claim frequencies associated with affected vehicles,” including an upcoming software update that will be available to customers for free beginning March 2023.
Hyundai is also providing free steering wheel locks to some customers who drive affected vehicles. Those locks are distributed by select law enforcement agencies throughout the country.
People can also bring their Hyundai to a local dealer for the purchase and installation of a security kit.
Kia said all of its 2022 models and trims have engine immobilizers. The manufacturer is also continuing to develop other solutions for vehicles that weren’t originally equipped with immobilizers, including an enhanced security software.
Like Hyundai, Kia is also providing free steering wheel locks to customers through local law enforcement agencies.
For those who do not have a standard immobilizer in their vehicle, the III also recommends asking the car dealer or manufacturer if they can install one.