Insurance Companies Refuse to Provide Coverage for Hyundai and Kias Due to High Theft Rates

If your Hyundai or Kia uses a physical ignition key, it can be stolen with relative ease. According to reports, a simple USB cable is all that’s needed to make off with a brand-new car. This has become a costly headache for law enforcement in cities like Columbus, Ohio, and Denver. Insurers in these areas and others have reached their limit. Major insurance companies like State Farm and Progressive are now declining to insure numerous vehicles from the two Korean automakers in these cities and beyond.

In a statement provided to The Drive, Progressive confirmed that it was no longer offering new insurance policies for “some” Hyundai and Kia vehicles in specific metropolitan areas. A spokesperson mentioned, “Due to the theft risk posed by certain Hyundai and Kia models, insuring these vehicles can be challenging, prompting us to adjust our acceptance criteria for new business (no changes for existing customers) on selected models in certain parts of the country.” The spokesperson added, “We will continue to monitor the situation and hope to reconsider our decision as the theft risk decreases and community awareness improves.”

When contacted, State Farm directed us to information on crime rates and insurance, indicating a similar conclusion that some Hyundais and Kias are currently uninsurable.

News reports from St. Louis, Missouri and Denver have independently verified that many Kia/Hyundai owners in these cities have recently been denied insurance coverage, even if their vehicles lack physical ignition keys. Two employees at The Drive residing in Denver attempted to obtain an insurance quote for a new Kia Soul from Progressive and were rejected. After providing vehicle details, the company responded, “We are unable to offer you a policy at this time.”

Individuals accepted by either insurer in these regions may face significantly higher premium rates. Jay Zunich, a resident of the St. Louis area, shared with the St. Louis Post-Dispatch, that Progressive quoted $350 monthly to insure his 2020 Hyundai Elantra, despite having push-button start.

The Kia Soul is one of the many vehicles from the two automakers affected by the vulnerability. <em>Kia</em>

Vehicles from the Korean brands constitute a significant percentage of vehicle thefts in numerous metro areas. 38% of all vehicle thefts in Columbus, Ohio, involve Hyundais or Kias. In Los Angeles, it’s 20%. The LAPD has issued alerts advising owners to install anti-theft measures like battery disconnects, GPS trackers, or steering wheel locks. A St. Louis dealership even provides a custom Bluetooth immobilizer for these vehicles, and some cities nationwide are contemplating legal action against the automakers to tackle the issue.

Hyundai—and by extension, Kia—have taken minimal steps to address the problem. Hyundai donated 80 steering wheel locks to Cleveland police and now offers a security kit (with installation costing up to $500) claimed to deter theft attempts effectively. Many perceive these measures as inadequate, and understandably, owners, local authorities, and insurers are displeased.

We reached out to Hyundai and Kia for a response; both provided a similar statement acknowledging the situation and expressing regret over the decisions made by State Farm and Progressive.

“Hyundai Motor America regrets the actions of insurers and their impact on select Hyundai vehicle owners and lessees, although we anticipate this impact will be temporary. Immobilizers are now standard on all Hyundai vehicles manufactured since November 2021—and have been standard on all Hyundai vehicles with push-button starts. Hyundai has initiated measures to reduce the incidence of claims related to affected vehicles, including an upcoming no-cost software update starting next month. Furthermore, Hyundai is distributing free steering wheel locks to selected law enforcement agencies nationwide for distribution to local residents with ownership or leases of affected models. Owners can also avail themselves of a customized security kit by visiting a local Hyundai dealer for purchase and installation. We apologize for any inconvenience caused to affected customers.”

Update 1/24/2023 @ 9:01p ET: This story has been updated to include statements from Progressive, State Farm, Kia America, and Hyundai Motor America.

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