Insurance companies say these cars are too easy to steal

Some insurance companies have stopped covering certain Hyundai and Kia models because of high theft rates.

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a certified personal finance counselor and former senior reporter at Policygenius, where he covered insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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Some insurance companies have stopped covering certain Hyundai and Kia models, an unprecedented response to high theft rates for those cars. 

The Highway Loss Data Institute says the frequently stolen vehicles lack passive immobilizers, which prevent potential thieves from hot-wiring cars. Popular TikTok posts have also provided instructions on how to steal these cars.

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Car insurance typically covers a stolen car as long as you have comprehensive coverage. But theft claims for 2015 to 2019 model year Hyundais and Kias tripled during the first half of 2022 compared to the first half of 2019, according to December data from HLDI. The Kia Seltos, Kia Sportage 4WD, and Hyundai Tucson 42D models without immobilizers were six times more likely to have theft claims than corresponding models with standard immobilizers. 

As a result, major auto insurers including Progressive and State Farm have stopped covering some Kia and Hyundai models in certain states.

“Insurers are responding to a clear change in the risk of theft for these vehicles,” says Robert Passmore, vice president of personal lines for the American Property Casualty Insurance Association, a trade group for home, auto, and business insurers. “Decisions regarding pricing or coverage are made by each insurer based on their individual assessment of risk.” If an insurance company decides these vehicles are too risky to insure, they may stop covering those vehicles, Passmore says. They may also charge more to cover them.

Videos on TikTok challenging teens to steal the vulnerable cars using only a USB cord have more than 40 million views under the hashtag “Kia Boyz.” 

“Hyundai and Kia have lagged other manufacturers in offering passive-immobilizer antitheft devices and standard equipment on their vehicles,” the December HDLI report says. Passive immobilizers were standard on just 26% of Kia and Hyundai vehicle series for 2015 models, compared to 96% of vehicle series for all other manufacturers combined. 

With the high theft rates for specific models, it’s understandable that insurance companies have responded so strongly, says Michael Mccloskey, an associate professor of risk management at Temple University.

“It’s just pure odds,” he says. “Insurance companies get a bad rap, but with this specifically, you can’t make those numbers work.”

Mccloskey says he isn’t aware of another situation in which an insurance company completely dropped a certain model of car, but there are cases of homeowners insurance companies refusing to cover homes in especially wildfire- or hurricane-prone areas

Some insurance companies may be more likely to cover these Kia or Hyundai models if you get an anti-theft device like a steering wheel lock, Mccloskey says. Even if a thief can get through a steering wheel lock, they’re more likely to move on to a car without one. 

“The gimmick with the TikTok thing is you can get the car started by hot wiring it, but if you’ve got the Club on it, you’d be surprised at how effectively that will stop someone,” Mccloskey says. 

Above all, drivers should shop around for coverage. Even if one or two insurance companies have dropped coverage, that doesn’t mean all of them have.

“Any time you don’t like the price you get with insurance, you just shop around,” Mccloskey says. “There’s so many (companies). I don’t think they’ve all dropped it.”

Angele Doakes, senior manager for Strategy and RevOps and a property and casualty insurance expert for Policygenius, says “While none of our carriers have informed us that they're no longer insuring certain vehicle types, it's important to stay aware of your personal needs and risk. Working with your insurance agent or advisor can help ensure you're covered for the issues you're most at risk of, and is the best way to hedge yourself against any changes your insurance carrier may make.”

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