State Farm refuses to provide insurance coverage for Hyundai and Kia models that are prone to theft in Louisiana.
The Hyundai/Kia theft situation just keeps getting worse. What started as a silly social media trend has now become a major headache for millions of Hyundai and Kia owners across the country. The latest blow is that insurance companies are refusing to cover models that are prone to theft. According to a report from New Orleans CBS affiliate 4WWL, State Farm is now denying coverage on certain Hyundai and Kia models in Louisiana, and possibly in other states as well.
This all stems from the infamous “Kia Boys” social media trend, where people post videos demonstrating how easy it is to start certain Hyundai and Kia models by tampering with the ignition switch and using a USB cable to start the car. The fallout from this trend in places like St. Louis and Milwaukee led to major insurance companies like State Farm and Progressive refusing coverage on vulnerable vehicles from these Korean manufacturers. The insurance companies argue that the risk of theft is too high. Unfortunately, this insurance problem is now spreading to other states.
Two agents from State Farm recently had a conversation with 4WWL, where they shared details about a list sent by State Farm headquarters. This list specifically highlights certain Hyundai and Kia models that the company will not provide insurance for in Louisiana. The models mentioned in the list span a period of six years, starting from the 2015 model year. Here are the models included:
- Hyundai Accent (2015-2021)
- Hyundai Elantra (2015-2021)
- Hyundai Kona (2015-2021)
- Hyundai Santa Fe (2015-2021)
- Hyundai Tucson (2015-2021)
- Hyundai Veloster (2015-2021)
- Kia Forte (2015-2021)
- Kia Optima (4-door and hybrid models) (2015-2021)
- Kia Rio (2015-2021)
- Kia Sedona (2015-2021)
- Kia Sorento (2015-2021)
- Kia Soul (2015-2021)
- Kia Sportage (2015-2021)
According to 4WWL, it seems like the Louisiana Department of Insurance was not informed about the changes. I contacted both Hyundai and State Farm to gather more details.
When I reached out to Hyundai regarding a similar insurance problem in St. Louis at the end of January, they provided me with the exact same statement. On the other hand, Kia stated that engine immobilizers are now included in all Kia models, and affected owners can receive wheel locks and software updates free of charge.
Kia America is disappointed with the decision made by some insurance companies and the impact it has on Kia vehicle owners and lessees. However, we believe that this situation will only be temporary. It’s important to note that all Kia vehicles now come equipped with engine immobilizers, and vehicles with push-button ignitions have always had this feature as standard equipment.
In order to address the issue, Kia has taken several measures to reduce the frequency of claims associated with the affected vehicles. We have been working on developing and testing enhanced security software for vehicles that didn’t originally have an immobilizer. We have also started notifying owners of certain models about the availability of this software upgrade, which will be provided to them at no cost. Our goal is to make these software upgrades available for most affected vehicles by mid-2023.
Furthermore, Kia is committed to supporting law enforcement agencies across the country by providing free steering wheel locks, whenever possible, for distribution to local residents who own or lease affected models.
If you have any questions about your Kia vehicle, please feel free to reach out to our Customer Care team directly at 1-800-333-4542 (4Kia) or visit the Owners Portal on kia.com. We are here to assist you.
I contacted State Farm to verify if this was an ongoing company policy. A State Farm representative assured me that it was indeed the case.
State Farm has temporarily halted the acceptance of new customer applications for specific model years and trim levels of Hyundai and Kia vehicles in certain states. This decision was made due to a significant rise in theft losses for these vehicles. It’s a grave issue that affects not only our customers but also the entire auto insurance industry.
We understand the importance of managing risk and minimizing excessive claim costs for the benefit of all our customers. Therefore, we had to take necessary measures to safeguard our policyholders and our business.
I wanted to know if other states were also implementing this policy, so I asked the State Farm representative. They didn’t give me a direct answer, but the two agents who spoke with 4WWL mentioned that the company is implementing this policy in Georgia, Louisiana, Oregon, Washington, and Pennsylvania. It’s important to note that this change will only affect new customers looking for coverage on the listed “high risk” models, not existing policyholders.
As messed up as it may sound, insurance companies have the power to deny coverage for various reasons. Unfortunately, the high theft rates of certain Hyundai and Kia models provide enough reason for this decision. According to data from the Highway Loss Data Institute, Hyundai and Kia models without immobilizers have a theft claim rate of 2.18 per 1,000 insured vehicles, which is significantly higher than the industry average of 1.21 per 1,000 vehicles.
