(AutoBlog) - Several local news outlets and now CNN have reported that State Farm Insurance and Progressive Insurance are refusing to issue new policies on certain Hyundai and Kia models, and raising rates for current policyholders that own the two brands.
The problem is out-of-control theft rates of Kia models from 2011 to 2021 that are started with a physical key, and Hyundai models from 2015 to 2021 that also use a key. The automakers, both part of the Hyundai Group, did not designed those vehicles engine immobilizers. After a group of kids in Wisconsin calling themselves the "Kia Boyz" posted a TikTok video showing how easily these particular models cars could be stolen, Hyundai and Kia theft rates have gone ballistic over the past two years.
In response to the surge, State Farm told CNN "This is a serious problem impacting our customers and the entire auto insurance industry," so it "has temporarily stopped writing new business in some states for certain model years and trim levels of Hyundai and Kia vehicles."
Progressive told the news channel, "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." Neither insurance company would specify which cities or regions were off limits to this subset of Hyundai and Kia owners. When the affected model owners apply online for a quote, they get an automated message denying consideration.
The Highway Loss Data Institute said engine immobilizers came standard on 96% of vehicles spanning the 2015 to 2019 model years, but only 26% of Hyundais and Kias from the same time. Models with push-button start always included immobilizers and aren't a part of the theft surge. However, comments by various owners say they are having their rates raised as well even though their vehicles aren't part of the trend.
The St. Louis Post-Dispatch wrote that both insurance companies stopped taking new policies for some owners in the St. Louis region, while Nationwide and Geico were raising premiums for some current policyholders. The paper said Kia and Hyundai thefts in the city climbed 1,450% in 2022, going from 273 vehicles stolen in 2021 to 3,958. When a policyholder with American Family Insurance had his annual rate raised $300, he began shopping around. Progressive and State Farm turned him down. A Geico customer had his rate upped by about $400 a year, got turned down by Progressive, and was quoted as much as $350 per month by another company.
The theft rates are even wilder in other metro areas. The Milwaukee Journal Sentinel said 66% of the 10,476 cars stolen in Milwaukee, Wisconsin in 2021 were Hyundais or Kias. Milwaukee being out in front might be due to a local connection to the trend, being in the same state where the first video appeared. But when we covered this in 2021, we wrote, "Denver is the only other city in the country where the South Korean brands have become low hanging fruit." That's no longer the case. According to Fox News' look through police data, 49% of the cars stolen in Grand Rapids, Michigan, were from the two brands, as were 45% of the cars stolen in Columbus, Ohio and 21% of the cars stolen in Philadelphia, Pennsylvania. In Los Angeles, local police put out a bulletin warning residents that Hyundai and Kia theres were 20% of all thefts. In Chicago, Hyundai and Kia thefts rose 767% in six weeks last year.
CBS News in Denver, Colorado reported last August that about 200 Kias and 200 Hyundais were stolen in Colorado in 2019. In 2021, more than 1,000 examples of each brand were stolen. The Drive has two staffers who live in Denver. When they tried to get a policy quote online this month from Progressive for a new Kia Soul, they received the message, "Based on the vehicle information provided, we are unable to offer you a policy at this time."
If you happen to live in these cities and own one of the affected cars, don't be surprised if your insurance company needs to update your rate or you get turned down while comparison shopping.
Michael Barry with the Insurance Information Institute said, "I’ve been in this industry for 15-plus years. It’s hard to call a precedent for this."
As of November 2021, all Hyundai and Kia models are fitted with engine immobilizers. In response to city and state officials who've brought lawsuits or demanded some sort of redress, the companies say the cars were compliant with all federal regulations and didn't need immobilizers.
Kia told CNN it has a software solution for vehicles without immobilizers and has begun notifying owners that they can have the code installed free. Hyundai has a free software update on the way. In the meantime, an old-fashioned car Club is one recommended way for owners to deter thieves. And maybe hold onto their current insurance policy if they can.
By Jonathon Ramsey
January 30, 2023
