“An extraordinary situation”: Insurance expert weighs in on companies dropping some Hyundai, Kia models from coverage

Progressive and State Farm Insurance both confirmed adjustments to coverage.
State Farm and Progressive say they will increase rates, or even limit new insurance policies, for some Kia and Hyundai models.
Published: Feb. 1, 2023 at 6:27 PM EST
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CHARLOTTE, N.C. (WBTV) - Two major insurance companies announced they will increase rates or limit new insurance policies for some Hyundai and Kia models.

This comes after the Highway Loss Data Institute released data showing models of Kia and Hyundai between 2015 and 2019 are roughly twice as likely to be stolen, compared to other cars of similar age.

WBTV has reported on recent online challenges like the “KIA Challenge,” showing people how to easily steal the older models using just a USB cord.

Also Read: Man says his stolen car spotted on Instagram before chase ends by Mecklenburg Co. Jail

“This is a really extraordinary situation, auto insurance is such a competitive market,” Michael Barry, with the Insurance Information Institute, told WBTV.

Barry says it came as a surprise to see companies like Progressive and State Farm pumping the brakes on policies.

In a statement, a spokesperson for Progressive told WBTV:

Progressive is committed to providing affordable insurance solutions. 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. 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. In response, in some geographic areas we have increased our rates and limited our sale of new insurance policies on some of these models.

We continue to insure existing customers who own these types of vehicles, however, have taken steps to communicate this elevated risk to them and provide them with tips to try and prevent their vehicles from being stolen. We’ll continue to monitor how this issue plays out, and if we see a change in theft rates to more typical levels, we’ll adjust our pricing and acceptance criteria accordingly.

A spokesperson for State Farm told WBTV:

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. This is a serious problem impacting our customers and the entire auto insurance industry.

We take seriously our responsibility to manage risk and the impact of excess claim costs on all our customers. In this case, it became necessary to take action to protect our policyholders and our business.

We are monitoring this situation very closely and will adjust our approach as appropriate.

“From an auto insurance perspective, if the car’s not recovered that’s a total loss,” Barry said.

Just last week David Chiarelli told WBTV about his Hyundai being stolen and later involved in a police chase.

Barry says if you drive one of these cars, you should contact your manufacturer.

“Make them aware that you know this is an issue and what steps are they taking,” he said.

A spokesperson for Kia told WBTV:

Kia America regrets this decision by certain insurers and its impact on owners and lessees of select Kia vehicles, which we anticipate will be temporary. Engine immobilizers are now standard on all Kia vehicles and have always been standard equipment on Kia vehicles with push-button ignitions.

Additionally, Kia has taken a series of actions to reduce the claim frequencies associated with affected vehicles. Kia has been developing and testing enhanced security software for vehicles not originally equipped with an immobilizer and has started notifying owners of certain models of the availability of this software upgrade at no cost to consumers. Kia anticipates that it will make software upgrades available for most affected vehicles by mid-2023. Kia is also continuing to provide free steering wheel locks, as available, to interested law enforcement agencies across the country for distribution to local residents who own or lease affected models.

Kia owners with questions regarding their vehicle may contact our Customer Care team directly at 1- 800-333-4542 (4Kia) or online via the Owners Portal on kia.com.

A spokesperson for Hyundai told WBTV:

Hyundai Motor America regrets this decision by insurers and its impact on select Hyundai vehicle owners and lessees, which we anticipate will be temporary. Engine immobilizers are now standard on all Hyundai vehicles produced as of November 2021 -- and have long been standard equipment on all Hyundai vehicles with push-button ignitions.

Additionally, Hyundai has taken a series of actions to reduce the claim frequencies associated with affected vehicles, including an upcoming software update, which will be available beginning next month and provided at no cost to customers.

Hyundai is also providing free steering wheel locks, as available, to select law enforcement agencies across the country for distribution to local residents who own or lease affected models. Owners may also bring their vehicles to a local Hyundai dealer for the purchase and installation of a customized security kit. We apologize for the inconvenience to affected customers.

Hyundai is committed to ensuring the quality and integrity of all our products through continuous improvement. Hyundai quality is among the best in the industry, ranking third among all brands in the 2022 U.S. Vehicle Dependability Study (VDS) and historically above the industry average in J.D. Power’s U.S. Initial Quality Study (IQS).

It is unclear which markets will be impacted, so Barry recommends keeping an eye on your policy.

“They are looking at personal driving record, where you live, and the make and the model of the vehicle,” he said.

Last year when theft started picking up, Gastonia Police suggested the following to drivers:

➡️ ALWAYS lock your car doors (regardless if it is a Kia or Hyundai)

➡️ DO NOT leave valuables in plain sight inside your car.

➡️ Secure any firearms in a lock box or case in the trunk of your car.

➡️ ALL car owners are encouraged to use or install an alarm system, vehicle tracking service, or any other anti-theft device that could help prevent having their car stolen.