Imagine wanting to write a check to an insurance company, only to receive a polite “no, thanks.”
State Farm and Progressive have stopped writing policies in at least a handful of U.S. cities for some older Hyundai and Kia models because the cars lack basic auto-theft prevention technology and are thought to be easy to steal.
Highway Loss Data Institute, a nonprofit scientific and educational group, released a report in September 2022 that found that many 2015-19 Hyundai and Kia models were targets because they lack immobilizers. Immobilizers are electronic devices that prevent a car from starting unless you have the right key – making it difficult for carjackers to “hot wire” the vehicle.
Immobilizers are now standard car equipment, including newer Hyundai and Kia models. Keep reading to learn why insurers are refusing policies for specific cars and what the automakers have done to rectify the problem.
Why are auto insurers declining to write policies for Hyundai and Kia cars?
Both State Farm and Progressive cited theft as a critical concern when asked by CarInsurance.com about not insuring the cars. Progressive said theft rates for particular Hyundai and Kia vehicles have more than tripled. In some markets, those vehicles are almost 20 times more likely to be stolen than other vehicles.
Both insurance companies said they would continue monitoring the situation and adjust their pricing and acceptance policies if they see changes.
It shouldn’t come as a surprise that some insurance companies are reluctant to write policies for vehicles that lack anti-theft and safety features, says Jesse Cunningham, a Bel Air, Maryland-based licensed insurance agent and the owner of Bauple.com.
“Car insurance companies use data to protect themselves from loss,” Cunningham says. “That’s why many insurers charge higher premiums for male drivers or drivers with a history of accidents.”
He says that auto insurance companies may also refuse to write policies for other types of vehicles.
“Many popular insurance companies also don’t insure luxury or expensive cars,” Cunningham says.
Hyundai and Kia settle a class-action lawsuit
In May 2023, Kia and Hyundai announced that they settled a class-action lawsuit and will pay more than $200 million to up to 9 million owners whose vehicles were stolen due to not having the immobilizers and other security features installed.
The lawsuit accused the companies of not taking sufficient measures to address the threats that made the cars vulnerable to theft.
According to a joint statement released by Hyundai and Kia, the settlement “will provide cash compensation for customers who incurred theft-related vehicle losses or damage not covered by insurance, in addition to reimbursement for insurance deductibles, increased insurance premiums and other theft-related losses.”
Lawyers representing the car owners in the lawsuit say that Hyundai and Kia will reimburse owners of the stolen vehicles for up to $145 million in out-of-pocket losses. This includes:
- Up to $6,125 for the total loss of a vehicle
- Up to $3,375 for damage to a car and personal property
Other expenses eligible for reimbursement include insurance-related expenses and costs tied to car rental, taxi, ride-share and public transit services not covered by insurance.
Additional funds will be available for expenses related to the thefts, including:
- Towing costs
- Fees and taxes related to replacement vehicles
- Losses tied to cars that were either crashed or stolen and never recovered
- Expenses associated with speeding tickets, red-light tickets or other penalties or fines that occurred after a car was stolen
In addition, owners of stolen vehicles will be eligible for a free security software upgrade and for reimbursement of lost income or child-care expenses related to installation of the upgrade.
Owners who are unable to receive the software upgrade will be eligible to be reimbursed for up to $300 if they install other theft deterrents, including:
- A glass breakage alarm or anti-theft system
- A steering wheel lock
- Other anti-theft aftermarket modifications
How Hyundai and Kia will help car owners get auto insurance
If you have struggled to secure insurance for your Hyundai or Kia, the manufacturers of those vehicles are taking steps to help.
Hyundai has partnered with independently operated AAA insurers to cover affected vehicles.
“Under the program, AAA insurers will issue new and renewal policies for eligible affected Hyundai customers,” says Ira Gabriel, senior group manager of corporate and marketing PR at Hyundai.
Drivers without push-button ignitions and immobilizing anti-theft devices in most states can now get a quote for their vehicle at the AAA website.
This option is available in all states except Alaska, Massachusetts and Washington (state). AAA does not offer insurance in those states.
4 million vehicles eligible for free Hyundai software update
In addition, Hyundai is releasing an anti-theft software update that will prevent thieves from starting vehicles. Once the software is installed, drivers who lock their car doors with their keyfob will automatically enable the car’s factory alarm. In addition, an “ignition kill” feature will activate.
The carmaker says 4 million vehicles are eligible for the upgrade. The upgrade is free, and drivers should expect installing the new software to take less than one hour, Hyundai says.
As an additional deterrent, Hyundai will affix a decal to the car’s window that alerts thieves that the car has been equipped with anti-theft technology. But Hyundai notes that the software upgrade is incompatible with a smaller group of vehicles within the 2011 to 2022 model years.
Hyundai is also reimbursing the steering wheel lock cost for impacted vehicle owners. The steering wheel locks are available nationwide at more than 450 law enforcement agencies.
Find more information about the carmaker’s efforts at the Hyundai website.
Kia is installing new security software in certain vehicles
For its part, Kia is installing new security software in vehicles thieves have targeted. The automaker says it has notified more than 2 million owners that the free upgrade is available at Kia dealerships. Kia notes that the process should take less than an hour to complete.
Like Hyundai, Kia also makes free steering wheel locks available to impacted Kia owners. Drivers can get one of these locks through one of more than 250 law enforcement agencies nationwide. Getting a steering wheel lock directly from Kia using the automaker’s website is also possible.
Kia is “actively working with them to ensure our customers have access to quality and comprehensive coverage,” according to Kia spokesman James Bell.
To learn more about these services, visit the Kia website.
Learn more: Car thefts are up again after a pre-pandemic decline
Tips for getting coverage for hard-to-insure cars
Don’t give up if you’re struggling to get car insurance because your vehicle is considered a theft risk because it’s a collectible or for some other reason. There are several things you can do to obtain a policy.
Contact the manufacturer about cars that are easy to steal
If your vehicle lacks up-to-date theft technology, contact the car’s manufacturer.
In mid-February 2023, Kia said that it completed the development of upgraded security software for specific models not originally equipped with immobilizers. The company said it has started notifying owners about the software enhancement, which it expects to make available to owners in the next few months at no cost.
The company also said its offering – through local law enforcement agencies – free steering wheel locks to those who own or lease an affected model.
Hyundai, also in mid-February, started rolling out a free software upgrade for its vehicles without push-button ignitions and immobilizing anti-theft devices. The company said the upgrade, initially available for 2017-20 Elantra, 2015-19 Sonata and 2020-21 Venue vehicles, can be made in less than an hour at dealer locations.
The company noted that some 2011-22 vehicles can’t be upgraded and, for owners of those cars, it’s putting together a steering-wheel-lock reimbursement program.
Update anti-theft devices for Hyundai and Kia vehicles
You can also talk to your insurance carrier about installing a car alarm, GPS tracker or other anti-theft device, says Lauren McKenzie, an insurance broker with A Plus Insurance.
“Most companies that are excluding these higher risk vehicles have it programmed in their quoting system, where it will automatically block or refuse a quote based on the year, make, model or by the VIN [vehicle identification number],” she says.
“If you own a vehicle that has been blocked, some companies may require additional information, which an underwriter would review to evaluate the risk and determine if it is something they want to insure.”
If you have difficulty finding the right insurer for a classic, collectible or custom car, some insurance companies focus on these vehicles, Cunningham says. Grundy, Hagerty and J.C. Taylor are just a few of these specialty insurers.
Shop around if your insurer is refusing to cover your car model
While this type of coverage is similar to standard car insurance, some key differences include how the vehicle is valued if it’s totaled and how often it can be driven.
But whether it’s a high-value collectible or a reliable Kia, if an insurer refuses to cover your car, shop around. Each insurer has its own criteria for deciding which cars it will cover. So, don’t assume that a rejection by one or two insurers means nobody wants your business.
Another good bet is to contact an independent insurance agent. If you have a luxury or specialty vehicle, Cunningham says, “an agent can find quotes from insurance companies that specialize in insuring those cars.”
Learn how to estimate the cost of car insurance in 2023
Resource & Methodology
Sources
CNN. “Some auto insurers are refusing to cover certain Hyundai and Kia models.” Accessed February 2023.
Insurance Information Institute. “What if I can’t find auto coverage?” Accessed February 2023.
Kia Media. “Hyundai Motor America and Kia America Resolve Consumer Litigation in Response to Vehicle Thefts.” Accessed May 2023.
Business Wire. “Hagens Berman: Hyundai, Kia Theft Class-Action Lawsuit Reaches Settlement Valued at More Than $200 Million.” Accessed May 2023.
Wall Street Journal. “Kia and Hyundai to Pay $200 Million to Settle Viral Car-Theft Suit.” Accessed May 2023.
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