Owners of certain Kia and Hyundai models are being denied insurance policies by some companies due to a steep rise in thefts of the vehicles.
State Farm said in a statement that it has temporarily stopped accepting new customer applications in some states for certain models made by both brands because thefts have “increased dramatically.”
“This is a serious problem impacting our customers and the entire auto insurance industry,” the company said. “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.”
Progressive is also taking steps to limit the sale of new policies to owners of those vehicles. “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,” a spokesperson for the company told CNN. “In response, in some geographic areas we have increased our rates and limited our sale of new insurance policies on some of these models.”
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Chicago is one of the cities that has experienced a spike in thefts of those vehicles, but the companies didn’t say whether Illinois was among the affected states.
In August, the Cook County sheriff’s office warned residents of a spike in thefts of those vehicles, urging owners to take precautions. Between July 2022 and early August, there was a 767% increase in thefts of Kia and Hyundai vehicles in the county, compared with the same period in 2021.
Last week, the Chicago Police Department announced that vehicle thefts, robberies and catalytic converter thefts had spiked across the city. Police determined that Kia and Hyundai vehicles are among the most frequently stolen and are being used to commit violent crimes.
The Insurance Institute for Highway Safety said many 2015-2019 Hyundai and Kia models lack an electronic immobilizer that prevents thieves from breaking in and bypassing the ignition. The device was standard on 96% of models from other manufacturers sold in the year 2015, but they were installed on only 26% of Hyundai and Kia vehicle models.
The increase in thefts is believed to be connected to the sharing of videos on YouTube and TikTok that demonstrate how to start these vehicles without a key, the Cook County Sheriff’s Department said. Thieves appear to be targeting unoccupied vehicles that require a physical key, not a starter button.
“Hyundai Motor America is concerned about the recent rise in auto thefts of certain Hyundai model vehicles,” the company said in a statement. “While all of our vehicles meet or exceed Federal Motor Vehicle Safety Standards, unfortunately, our vehicles have been targeted in a coordinated effort on social media.”
The availability of the how-to videos sparked a coalition of insurance industry entities to send a letter to YouTube executives this month, asking the company to take down the videos.
“Everyday consumers are being victimized by criminals using social media platforms to learn their newest illegal tricks and techniques,” said David Glawe, president and chief executive of the National Insurance Crime Bureau. “Some platforms are not doing enough to protect innocent victims from unnecessary harm.”
