Drivers struggle to insure Kia, Hyundai models that remain target of theft

Problems insuring some Kia and Hyundai vehicles

Problems insuring some Kia and Hyundai vehicles

Email after email sent to 5 EYEWITNESS NEWS over the weekend chronicles drivers’ struggles to insure certain Kia and Hyundai models that lack an engine immobilizer. The anti-theft hardware is standard in just about any other car.

In response to a social media post asking people to share their experiences, one viewer wrote that she was denied insurance coverage for her Kia by three companies.

“Had we known this, we would have gone with a different vehicle!” she continued.

Another respondent said they tried to switch insurers recently, only to find out that the new company refused to insure the Kia Optima they’ve owned since 2015.

“They realized that the risk is so high, and they hadn’t collected enough premium to anticipate for this,” explained Mark Kulda, the vice president of public affairs for the Insurance Federation of Minnesota. “So because of that, they had to do something that I’ve never seen an insurance company do which is pick a specific make and model and say, ‘We’re not insuring that car anymore.’ And many companies did that.”

5 EYEWITNESS NEWS reached out to multiple insurance companies. Only State Farm responded. A spokesperson said the company has “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,” adding: “This is a serious problem impacting our customers and the entire auto insurance industry.”

Asked for the names of other major insurers who’ve taken up a similar policy, Kulda said, “Most of them don’t want to say, but they’re the ones that you’ve heard of. So if you just watch the ads on TV, you’ll hear names. Those are most of the ones that say they’re not doing this.”

Some insurance companies have specifically stopped providing comprehensive coverage, which lenders require for car owners who are still paying off their loans.

The companies that remain willing to write full coverage insurance policies for the affected cars also don’t want that publicized, Kulda said, “because they don’t want to end up being the insurer of last resort that now have to take on all these really high-risk cars.”

Drivers responding to 5 EYEWITNESS NEWS’ request for comment said when they did secure a policy, the premiums were much higher compared to premiums associated with other similarly valued — or even more highly valued — vehicles. Others said their premium drastically increased upon renewing a policy on an affected Kia or Hyundai this year.

One person said they went from paying $600 for 6 months to insure their Hyundai Santa Fe to $1,300.

“So it’s becoming a serious problem that’s costing Minnesota drivers literally tens of millions of dollars in higher insurance premiums,” Kulda said, referring to the manufacturers’ decision not to include engine immobilizers in roughly 7 million cars ranging in model years from about 2011 to 2022.

Insurers’ subsequent decision not to cover certain affected vehicles stands regardless of whether a driver has gotten the free software update both manufacturers rolled out earlier this year that’s said to make the cars tougher to steal, Kulda said.

“The software update is so far showing that it doesn’t necessarily work all the time,” Kulda said, citing a few nationwide reports, like this one from WRC-TV in Washington.

“So from our perspective, that’s not really successful. What they need to do is actually install the engine immobilizers like every other manufacturer has.”

Kia did not immediately respond to request for comment on Sunday.

A spokesperson for Hyundai maintained, “At this time, Hyundai is not aware of any confirmed failures of the software,” adding, “Engine immobilizers are now standard on all Hyundai vehicles produced as of November 2021.”

Hyundai has installed the software update in 2.5% more vehicles since we last inquired three weeks ago. About 17.5% of roughly 4 million affected Hyundais nationwide now have the update, the spokesperson wrote on Sunday.

Drivers can buy engine immobilizers themselves from a third party and then hire a mechanic to install it, Kulda added.

“It’s a couple hundred dollars. It might be worth it for you as a consumer,” he said. “And maybe if you do that and prove to the insurance companies that you’ve done that, you might be able to get a company that would give you coverage if you want to do that.”

After noting the option, he added, “That’s a lot to ask of a consumer that could be prevented if Kia and Hyundai would do the right thing.”