Major car insurers plan to drop coverage on certain car models due to rise in thefts
Major car insurers plan to drop coverage on certain models
Progressive and State Farm auto insurers are refusing to write policies for some older Hyundai and Kia models because they are susceptible to thefts.. Older models are easier to steal because they don’t have an engine immobilizer, officials said, which stops car thieves from bypassing the ignition and essentially "hot-wiring" a car.
SEMINOLE COUNTY, Fla. - Seminole County resident Kelly Hayden was surprised to learn major car insurance companies are declining coverage on certain Hyundai and Kia models in select locations because they are a hot target for car thieves, according to law enforcement.
Hayden said, "I will be looking more into it as far as concerns for my vehicle and concerns as to why they’re dropping it, not offering some sort of solution."
Last summer, FOX 35 News first told you about criminals targeting older Hyundai and Kia models after viral videos surfaced demonstrating how they could be stolen. Older models are easier to steal because they don’t have an engine immobilizer, officials said, which stops car thieves from bypassing the ignition and essentially "hot-wiring" a car.
According to data from the Insurance Institute for Highway Safety, in 2015 when immobilizers were standard on 96% of other manufacturers’ vehicles, they were only standard on 26% of Hyundai and Kia vehicle models. Now some owners of older Hyundai and Kia models have been left stranded by their insurance companies.
"They may have some slight difficulties if they try to pursue the two – State Farm and Progressive – if they try to obtain quotes from there, and they should expect to either get a decline or a very high rate," Daniel Guevara of Insurance Land told FOX 35.
We reached out to the insurance companies and the car manufacturers for comment. We have not yet heard back from Progressive.
A spokesperson with State Farm told FOX 35:
"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."
A spokesperson with Kia America told FOX 35:
"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."
In the meantime, if you own one of these vehicles, Daniel Guevara at Insurance Land in Sanford said, "The biggest thing I would recommend consumers to do is to reach out to their insurance agent if you have one of those two vehicles within that year timeframe, the 2015-2019 and ask those right questions. Am I going to have any problems come renewal? Am I going to experience a rate increase to where it’s not going to be cost-effective? Do you have another insurance company you can place me with?"
A spokesperson with Hyundai told FOX 35:
"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)."