State Farm said it has temporarily stopped providing new auto insurance policies for certain model years and trim levels of Hyundai and Kia vehicles in some states due to an increase in thefts for those cars.
“This is a serious issue that affects our customers and the entire auto insurance industry,” a State Farm spokesperson said in an email to CBS MoneyWatch.
State Farm did not specify which types of Hyundai and Kia vehicles are affected, or in which states it suspended new car insurance policies. But the decision comes after the Highway Loss Data Institute found that theft claims for 2015-2019 Hyundai and Kia vehicles were almost twice as high as those of all other automakers.
The reason for the rise in theft claims is the lack of electronic immobilizers in some Hyundai and Kia vehicles that would otherwise prevent thieves from breaking in and bypassing the ignition, the Highway Loss Data Institute said. Electronic immobilizers are standard on almost all vehicles of those years made by other automakers, he added.
“We take seriously our responsibility to manage the risk and impact of excess claim costs on all of our customers,” State Farm said in its statement. “In this case, it became necessary to act to protect our policyholders and our business.”
Progressive holds back new policies
Progressive also stopped writing new policies on certain Hyundai and Kia cars, CBS station KDKA reported. Progressive did not immediately return a request for comment from CBS MoneyWatch.
In an email to CBS MoneyWatch, Hyundai said it “regrets this decision by insurers and its impact on some owners and lessees of Hyundai vehicles, which we believe will be temporary.”
“Engine immobilizers are now standard on all Hyundai vehicles produced from November 2021 – and have long been standard equipment on all Hyundai vehicles equipped with a push button ignition,” says the press release.
The automaker added that it is planning a software update next month that will help affected vehicles, and is also providing free steering wheel locks to some law enforcement agencies for them to use. distribute to local residents who own affected models. Owners can also take their car to local Hyundai dealerships to purchase and install a custom security kit, he added.
Kia America also told CBS MoneyWatch that it “regrets” the insurers’ decision. It added that it will have software upgrades for most affected vehicles by mid-2023. In the meantime, he said he was also providing free steering wheel locks to law enforcement to distribute to affected car owners.
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