State Farm, Progressive will no longer insure certain models after bursts of theft

Thanks to social media and urban crime, some auto insurers are refusing to insure certain car models that are too easy to steal.

Progressive and State Farm have confirmed they are not writing the rules for some Hyundai and Kia models made between 2015 and 2019 because they lack the anti-theft devices common in the auto industry during those 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 conventional anti-theft devices, according to CNN Business.

One important device is the immobilizer, which is controlled by a chip in the car and another on the ignition key, which allows the car to operate when the key is turned. The car won’t start without the chips. HDLI notes that many of the target models do not have these immobilizers, according to CNN Business.

While 96 percent of other automakers included anti-theft devices in their vehicles, only 26 percent of Hyundai and Kias vehicles in those years had them, according to CNN Business.

Due to the lack of security devices in 2021, a trend has emerged on social media of car thieves posting videos demonstrating how easy it is to steal these cars. This trend, along with an increase in car theft in many major U.S. cities, is blamed for the theft of these Hyundai and Kias vehicles, which are more than 30 times the dollar amounts of 2019.

While the cost of auto insurance continues to rise, some insurance companies have acknowledged that they are suspending coverage for these models.

“State Farm has temporarily suspended new order records in certain states for certain model years and trim levels of Hyundai and Kia vehicles as theft losses for these vehicles have skyrocketed,” CNN said in a statement. “This is a major issue affecting our customers and the entire auto insurance industry.”

Progressive spokesman Jeff Siebel also noted that the company is retreating.

“Last year, we saw the number of thefts of some Hyundai and Kia vehicles more than triple, and in some markets, these vehicles are nearly 20 times more likely to be stolen than other vehicles,” he told CNN in an email.

“Given that we rate our policies based on the level of risk they pose, this explosion in theft in many cases makes these vehicles extremely difficult for us to insure. In response, we have increased our rates in some geographies and restricted the sale of new insurance policies for some of these models.”

According to a CNN Business report, neither company has said it will revoke policies already issued for these models.

Hyundai, which has been surrounded by recalls, and Kia operate as separate companies in the US, but Hyundai Motor Group owns a significant portion of Kia. In addition, engineering is divided between companies. Since 2019, companies have made immobilizers standard on all models.

Both automakers are trying to fight theft by offering free upgrades and security kits to owners in the US, according to CNN Business. Hyundai is also offering free steering wheel locks to US police departments to give to car owners to try and deter theft.

However, the problem is likely to affect the value of these models in the used car market, especially if insurance companies persist in refusing to insure them.

In most states, you cannot drive a vehicle unless you show proof of insurance.

Meanwhile, car theft is a growing problem in America’s major cities, whether owners own Hyundais or Kias.

It’s so bad in Chicago that groups of youths as young as 10 are joining gangs of car thieves, 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 as many car thefts as it did in 2014.

But it’s not just Chicago. CNN noted in a January 2022 report that many major cities have experienced a massive increase in car theft since the start of the coronavirus pandemic. Indeed, many may remember the horrific case in 2021 when two teenage girls were charged with murder after the brutal murder of a 66-year-old car owner in Washington, D.C. while stealing his car.

Car theft is already becoming a serious enough problem, although car companies don’t make it easy for thieves. The question arises: can something else be done to make Hyundai and Kia solve this problem?