Major Insurance Companies Are Refusing to Cover Hyundai and Kias Because They’re Stolen Too Much
Some vehicles from the Korean brands are remarkably easy to steal, and major insurers have had enough.
If your Hyundai or Kia uses a physical ignition key, it can be stolen with relative ease. As we've reported, a USB cable is all that's necessary to get away with a new car. It's a costly problem for police in cities such as Columbus, Ohio, and Denver. Insurers in these regions and others have now had enough. Insurance giants State Farm and Progressive are now refusing to insure many vehicles sold by the two Korean auto brands in those cities and others now.
In a statement to The Drive, Progressive confirmed that it was no longer issuing new insurance policies to "some" Hyundai and Kia vehicles in certain cities. "Due to the theft risk that some Hyundai and Kia vehicles present, in many cases it makes these vehicles difficult to insure, so in certain areas of the country we have adjusted our acceptance criteria for new business (there is no change for existing customers) on some of these models," the spokesperson said. "We’ll continue to monitor how this issue plays out and are hopeful to be able to revisit our decision as the theft risk diminishes and community awareness improves."
We also reached out to State Farm, who pointed us to resources on crime and insurance rates, presumably so we could reach a similar conclusion that some Hyundais and Kias are uninsurable right now.
So far, news outlets in St. Louis, Missouri and Denver have independently confirmed many Kia/Hyundai owners in those cities have been denied coverage recently, even if their vehicles do not have physical ignition keys. Two staffers at The Drive who live in Denver attempted to obtain a quote for a new Kia Soul from Progressive and were denied. "Based on the vehicle information provided, we are unable to offer you a policy at this time," the company said.
Those who are accepted by either insurer may have much higher rates in these areas. A resident of the St. Louis region who spoke to the St. Louis Post-Dispatch, Jay Zunich, said Progressive wanted $350 a month to insure his 2020 Hyundai Elantra, even though it has pushbutton start.
Vehicles from both Korean brands represent a staggering percentage of vehicle thefts in many metropolitan areas. In Columbus, Ohio, 38% of all vehicles stolen are Hyundais or Kias. In Los Angeles it's 20%. The LAPD has even issued an alert instructing owners to install theft deterrents like battery disconnects, GPS trackers, or steering wheel locks. One dealer in St. Louis even offers its own Bluetooth immobilizer for the cars, and a few cities nationwide are considering suing the automakers to address the problem.
Hyundai—and by extension, Kia—have done little to combat the issue. Hyundai donated 80 steering wheel locks to Cleveland police and now offers a security kit—which owners have to pay up to $500 to install—that allegedly prevents easy thefts. Many feel it's too little too late, and needless to say, owners, local governments, and insurers aren't happy.
We reached out to Hyundai and Kia for comment; both send a similarly worded statement acknowledging the situation and saying the automakers "regretted" the decision by State Farm and Progressive.
"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."
Update 1/24/2023 @ 9:01p ET: This story has been updated with comments from Progressive, State Farm, Kia America, and Hyundai Motor America.
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