Rising Auto Theft Rates Pose Insurance Challenges for Kia and Hyundai Owners

Last year we saw an unforeseen increase in auto theft among Kia and Hyundai models due to the absence of a standard engine immobilizer. Despite taking certain measures to address this safety concern, the issue continues to persist today. The TikTok trend is affecting a range of car owners, with many now struggling to insure their vehicles in 2023.

In response to the uptick in auto theft, insurance companies have begun denying coverage to Forte, Optima, Rio, Sedona, Soul, and Sportage owners. This decision comes as a strategic move to mitigate potential losses and protect their interests in an increasingly challenging market.

They realized that the risk is so high, and they hadn’t collected enough premium to anticipate for this,” – Mark Kulda, the vice president of public affairs for the Insurance Federation of Minnesota

What is an engine immobilizer?

An engine immobilizer is an electronic security device installed in vehicles to prevent unauthorized access and theft. Its primary function is to prevent the engine from starting without the use of the correct key or fob.

When a vehicle equipped with an engine immobilizer is turned off, the system engages and prevents the engine from being started unless the proper electronic key, which contains a unique code or microchip, is inserted into the ignition or brought within proximity of the car.

The vehicle’s onboard computer verifies the key’s authenticity, and it allows the engine to start only if the correct code is recognized. This means that even if a thief attempts to hotwire the car or use an incorrect key, the engine immobilizer will prevent the engine from starting, thus rendering the theft attempt a failure.

The engine immobilizer has become a standard anti-theft feature in modern vehicles, and its effectiveness has contributed to reducing car theft rates significantly. As technology has advanced, many vehicles now come with sophisticated immobilizer systems that use encrypted codes, making it even more challenging for thieves to bypass the security measures.

In short, the inclusion of an engine immobilizer adds an extra layer of protection to the vehicle, giving car owners more confidence in the security of their cars and potentially leading to lower insurance premiums due to the decreased risk of theft. Unfortunately, select 2015-2021 Kia and Hyundai models don’t offer this defense mechanism.

Reasons insurance providers are limiting coverage

As mentioned, the lack of an engine mobilizer feature has left certain Kia and Hyundai models more vulnerable to theft attempts, resulting in increased insurance claims and potential losses for insurers.

To manage their risk exposure, insurance companies may adjust their coverage policies and pricing based on statistical data and historical trends. Insurance providers may take one of two actions. They may either charge higher premiums for coverage or, in more extreme cases, completely refuse to offer coverage for those specific models altogether.

Additionally, the cost of repairing or replacing stolen Kia and Hyundai models can also be a factor. If these cars are more expensive to repair due to part shortages or have higher replacement costs, insurers might be hesitant to provide coverage for them, as it could lead to increased financial liability for the company.

All in all, because these vehicles did not come equipped with the added security layer, it falls on the owner to find a solution.

Ways to protect yourself from auto theft

For the time being, drivers should explore alternative security options. They may also want to seek out insurance providers who offer specialized coverage for theft-prone models.

Which means, finding appropriate coverage might involve some trial and error. Many insurance companies are cautious about taking on too many high-risk models and may be selective in their offerings. Even the ones who are offering coverage do not want it well publicized due to the number of auto thefts occurring.

Research has shown that several major insurance companies are, in fact, not providing coverage. As a result, you may have to turn to an independent or privately-owned insurance organization instead.

To conclude

As the automobile industry continues to evolve and adapt to meet the ever-changing security requirements, the ultimate goal is to ensure that comprehensive anti-theft features become the standard for all vehicles. The Kia/Hyundai debacle emphasizes the importance of these features.

By persistently pushing for comprehensive anti-theft measures and embracing emerging technologies, we can ensure that safety and security remain at the forefront of the automotive landscape.