This article orininally appeared in the BIG I Independent Agent Magazine
Written by:Will Jones
Hyundai and Kia are stepping up their theft deterrent system and providing other anti-theft resources after a trend on TikTok led to a wave of vehicle thefts and forced two prominent insurance carriers to announce that they will be limiting applications for coverage.
Last week, Korean automakers Hyundai and Kia announced that they will offer software upgrades to 8.3 million U.S. vehicles in an attempt to limit spiraling car thefts caused by the viral social media trend.
In September 2021, the Highway Loss Data Institute (HLDI) reported that Hyundai and Kia theft claims were nearly twice as common compared to all other manufacturers and blamed a lack of electronic immobilizers. Around the same time a social media trend that demonstrated how easy it is to steal the vehicles was going viral.
Thieves began posting videos of their thefts and joyrides and even videos explaining how to steal the cars during 2021, pointing out the absence of an electronic mobilizer that prevents thieves from simply breaking into the car and bypassing the ignition.
“Vehicle theft losses plunged after immobilizers were introduced," said Matt Moore, senior vice president of HLDI. “Unfortunately, Hyundai and Kia have lagged behind other automakers in making them standard equipment."
In the model year 2015, immobilizers were standard on 96% of other manufacturers' vehicles but were standard on only 26% of Hyundai and Kia vehicle models, HLDI said.
In Wisconsin, one of the earliest-affected states, the social media fad caused overall losses from Hyundai-Kia thefts to soar to more than 30 times the 2019 level, according to HLDI, which has led to some carriers restricting coverage in certain areas.
“State Farm has temporarily stopped accepting new customer applications 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 said in a prepared statement. “This is a serious problem impacting our customers and the entire auto insurance industry."
Additionally, Progressive acknowledged the rapid rise of thefts, noting that it has “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," according to a statement. “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."
Progressive will continue to insure existing customers who have these vehicles but has notified them of the "elevated risk." The company has also given policyholders tips to secure their vehicles.
"We'll continue to monitor how this issue plays out, and if we see a change in theft rates to more typical levels, we'll adjust our pricing and acceptance criteria accordingly," the statement added.\
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