State Farm, Progressive Will No Longer Insure Certain Models After Theft Spikes
Thanks to information spreading on social media and inner-city crime, some auto insurers are refusing to insure certain car models that are too easy to steal.
Progressive and State Farm have confirmed that they are not writing policies for certain Hyundai and Kia models made between 2015 and 2019 because they lack the anti-theft devices common in the auto industry during those model years, according to CNN Business.
According to the Highway Loss Data Institute, an insurance industry research group, these particular car models are more than twice as likely to be stolen than others because they lack the common anti-theft devices, CNN Business reported.
One of the important devices is an immobilizer, which is operated by a chip in the car and another on the ignition key that allows the car to operate when the key is turned. Without the chips, the car is prevented from turning on. HDLI notes that many of the targeted models do not have these immobilizers, according to CNN Business.
While 96 percent of other car makers included the anti-theft devices in their cars, only 26 percent of Hyundais and Kias had them in those model years, according to CNN Business.
Because of the lack of security devices, in 2021 a social media trend arose with car thieves posting videos showing how easy it is to steal these cars. The trend, along with the rise in carjackings in many big U.S. cities, is blamed for thefts of these Hyundais and Kias seeing a spike to more than 30 times the dollar amount levels from 2019.
Even as the cost of car insurance continues to rise, some insurance companies admitted that they are halting coverage for these models.
“State Farm has temporarily stopped writing new business in some states for certain model years and trim levels of Hyundai and Kia vehicles because theft losses for these vehicles have increased dramatically,” the company told CNN in a statement. “This is a serious problem impacting our customers and the entire auto insurance industry.”
Progressive spokesman Jeff Sibel also noted that the company is pulling back.
“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,” he told CNN in an email.
“Given that we price our policies based on the level of risk they represent, this explosive increase in thefts in many cases makes these vehicles extremely challenging for us to insure. In response, in some geographic areas we have increased our rates and limited our sale of new insurance policies on some of these models.”
Neither company said it would cancel policies already issued for these models, according to the CNN Business report.
Hyundai, which has been beset with recalls, and Kia operate as separate companies in the U.S., however, the Hyundai Motor Group owns a large part of Kia. Also, the engineering is shared between the companies. Since 2019, the companies made immobilizers standard on all models.
Both car makers are trying to deal with the thefts by offering free upgrades and security kits to U.S. owners, CNN Business reported. Hyundai is also offering free steering wheel locks to U.S. police departments to hand out to car owners to try and prevent the thefts.
The problem, though will likely affect the value of these models on the used market, especially if insurance companies persist in refusing to insure them.
In most states, you can’t drive a vehicle unless you can show proof of insurance.
Meanwhile, car theft is a rising problem in America’s big cities, regardless of whether owners have Hyundais and Kias.
It is so bad in Chicago that groups of youths as young as 10 years old are joining car theft rings, according to police reports cited by the Chicago Sun-Times in a 2020 report. And in August, Fox News reported that Chicago was already on track to have six times more carjackings than in 2014.
But it isn’t just Chicago. CNN noted in a January 2022 report that many major cities had seen a massive rise in carjackings since the coronavirus pandemic’s onset. Indeed, many may recall the horrific case in 2021 when two teen girls were charged with felony murder after brutally murdering a 66-year-old car owner in Washington, D.C., while stealing his vehicle.
Carjacking is already getting bad enough without the car companies making it easier for the thieves. One wonders: Is there more that can be done to get Hyundai and Kia to solve this problem?
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