A Kia sign hangs over a row of unsold 2021 Seltos in December 2020 at a dealership in Centennial, Colorado.
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David Zalubowski/AP
A Kia sign hangs over a row of unsold 2021 Seltos in December 2020 at a dealership in Centennial, Colorado.
David Zalubowski/AP
Before going car shopping recently, Reyna Garcia did her homework.
She was interested in purchasing a used Kia Forte from a local dealership near her home in Aurora, Co., but had heard about a rash of thefts across the country involving certain Kia and Hyundai vehicles. Asked the seller if the 2020 model he wanted was affected.
“His response was something like, ‘Well, this car has a push-button start, so you should be fine,'” Garcia said in an interview with NPR.
The deal went through, and Garcia and her teenage daughter began driving the car.
It wasn’t until weeks later that they discovered the problem: Garcia had added the Forte to his Allstate insurance policy through the company’s mobile app while at the dealership, but when he followed up later, he learned that the company refused to cover the Forte because of the high rate of theft.
Garcia and an insurance broker tried a dozen other companies, but all declined coverage. He said he explained his situation to the dealer and tried to sell them back the Forte, but their offer would have left him with a $7,000 loss.
Reyna Garcia’s daughter Kira Gray poses in front of the used Kia Forte the family recently purchased.
Reyna Garcia
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Reyna Garcia
“I feel super vulnerable. I feel taken advantage of by a dealer. I feel like this is their industry, and they should be knowledgeable about it. And I’m also very frustrated with the insurance industry,” Garcia said. “All these things collided and I think the consumer is definitely caught in the middle.”
Officials say more than eight million Hyundais and Kias from model years 2011 to 2022 can be connected with a USB cable and do not have engine immobilizer, a common anti-theft feature that prevents the engine from starting unless the vehicle key is nearby. They have increasingly become a target for thieves.
Both manufacturers are offering affected customers free software updates they say will fix the problem, but cars affected by the vulnerability are still on the market, despite a growing list of major insurance companies saying they won’t cover them for now. . Most states require drivers to have auto insurance to be on the road.
Consumer advocates say several players are to blame: automakers that omitted anti-theft features on certain models, dealers that continue to sell affected vehicles, insurers that deny coverage, but it’s drivers who that get stuck.
“People can’t necessarily go out and buy a new car,” Douglas Heller, director of insurance at the Consumer Federation of America, told NPR. “There are a lot of people who can only afford a used car, and that could be an affordable vehicle that is otherwise probably pretty typical when it comes to risk.”
A hack that spread to social networks
Over the past couple of years, videos have appeared on TikTok of people demonstrating how to steal certain Hyundais and Kias with a keyless ignition. Thieves can remove the steering wheel column cover and start the car with a USB cable or something similar.
Since these models also don’t have engine immobilizers, a thief can start the car and drive away without a key. About a quarter of the 2015 Hyundai and Kia vehicle lineups had standard immobilizers, compared with 96 percent of all other brands, according to the Highway Loss Data Institute.
Since the social media trend gained popularity, thefts of these vehicles have increased. In Minneapolis last year, thefts from Kias and Hyundais were up 836% over the previous year. Federal regulators said earlier this year that eight people had died in 14 accidents related to the TikTok challenge.
In April, a group of state attorneys general called for a nationwide recall of the affected vehicles, saying the thefts are creating a “safety crisis” on America’s roads, but so far the National Traffic Safety has not initiated any.
Insurance companies, however, have taken action. Several advertisers would not accept new customers with vehicles that have these vulnerabilities.
Allstate, Progressive and State Farm confirmed to NPR that they are not granting new insurance policies in some states for certain Hyundai and Kia vehicles because of the high risk they pose for theft. Existing customers will maintain their coverage.
California Attorney General Rob Bonta, right, speaks about the increase in Kia and Hyundai vehicle thefts at a press conference Thursday, April 20, 2023, in Berkeley, California.
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“Insurers are in the business of taking on new customers, so this is a very unusual circumstance,” said Michael Barry, director of communications for the Insurance Information Institute, an industry group.
“But the theft rates of certain Hyundai and Kia vehicles are so high that several brand insurers, to protect their own bottom lines as well as those of their other policyholders, have decided to temporarily suspend taking on new policyholders.” , he told NPR.
The companies did not say which specific models they would not cover, but WWL-TV in New Orleans reported that State Farm was pausing coverage for some popular vehicles, including Hyundai’s Elantra and Tucson and Kia’s Optima and Sportage.
Hyundai says the software solution for its vehicles is currently available at all its dealerships nationwide, while Kia says continue to roll out your update. It’s unclear how many customers have received the software patches so far.
In mid-April, Hyundai also announced that it had partnered with AAA-affiliated insurers in a program to offer insurance plans to people who had purchased stolen cars. Kia spokesman James Bell told NPR that the company was also working with insurers on a solution.
“Kia America regrets the decision of certain insurers and its impact on owners and lessees of certain Kia vehicles, which we anticipate will be temporary,” it said in an emailed statement. “We are in contact with the major insurance companies so they are aware of the actions we have taken and are actively working with them to ensure our customers have access to comprehensive and quality cover.”
The loopholes still hold some car buyers back
Auto insurance is regulated by state governments and some have taken note of insurers pausing coverage for certain Hyundai and Kia vehicles.
The Maryland Insurance Administration issued a bulletin in February reminding companies that they must insure vehicles according to the rates they’ve filed with the state, and that refusing to do so could be a violation of state law.
Reyna Garcia said that when she bought the Forte in early April, the dealer only confirmed that she had an auto insurance policy with Allstate, but did not confirm that Allstate had accepted the Forte on the policy before leaving – leave her in the car.
When contacted by NPR, Allstate said through a spokesperson that it was contacting Garcia “to apologize for the service outage.” The company also said liability coverage is available for the affected vehicles in Colorado, but comprehensive and collision coverage is not.
The dealership where Garcia bought the car did not respond to a message left by NPR.
Experts say potential buyers should check with their insurance company before buying a used Hyundai or Kia to make sure they can insure their purchase when it drives off the lot.
CarMax, the nation’s largest used car seller, said in a statement that it requires customers to purchase insurance when they buy a vehicle.
“We are aware that some insurance companies may not be offering coverage in select markets for some Kia and Hyundai models,” the company said in a statement emailed to NPR. “If a customer has questions about eligibility or coverage, we encourage them to contact their insurance company.”
Last week, Garcia finally got auto insurance on the Forte through Liberty Mutual.
To get the best rate, she also had to move her family’s two other auto insurance policies and her homeowner’s insurance policy to Liberty Mutual. Pay $150 more per month than before.
The single mother, who shares a car insurance plan with two of her daughters, is still worried that the deal could somehow fall through and that she is in arrears on the rest of the loan she took out to buy the Forte .
Garcia, who works for a health plan, says he knows how the insurance industry works, but he’s never heard of companies refusing to cover specific vehicle models.
“I’m a smart person and I feel really stuck. And the financial loss could be huge. I’m sitting here trying to figure out how I can come up with $19,000 to pay off a car that we can’t drive,” she said. “This, again, seems like a complete debacle — that these companies and these industries are not working together to protect the consumer.”
