State Farm declares 105 Kia, Hyundai models ‘ineligible’ for new insurance in Louisiana - Insurance News | InsuranceNewsNet

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February 2, 2023 Newswires
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State Farm declares 105 Kia, Hyundai models ‘ineligible’ for new insurance in Louisiana

New Orleans Advocate, The (LA)

Starting Jan. 25, State Farm Insurance agents in Louisiana are no longer doing business with owners of 105 Kia and Hyundai models that have been blacklisted because they are vulnerable to theft, employees told WWL-TV.

Related: Auto thefts surge in New Orleans

The employees say they were sent a chart of models and years that are included in the restriction. It reads: "Kia and Hyundai models and years with an 'x' below will be ineligible unless the sales associate has verified the presence of a passive engine immobilizer."

The list includes:

2015-2021 Hyundai Accent2015-2021 Hyundai Elantra2015-2021 Hyundai Kona2015-2021 Hyundai Santa Fe2015-2021 Hyundai Tuscon2015-2021 Hyundai Veloster2015-2021 Kia Forte2015-2021 Kia Optima (4-door and hybrid models)2015-2021 Kia Rio2015-2021 Kia Sedona2015-2021 Kia Sorento2015-2021 Kia Soul2015-2021 Kia Sportage

Two State Farm employees told WWL-TV that the restrictions apply in Georgia, Louisiana, Oregon, Washington, and Pennsylvania. The restrictions do not apply to current policyholders, only to drivers who are looking for new policies.

State not notified

The Louisiana Department of Insurance said it has not been notified of the restriction.

"The LDI has not received anything from Progressive, State Farm, or other insurer regarding this, and we have no reason to believe we are on that list," a spokesperson for the department said.

A spokesperson for State Farm's corporate office confirmed that the company had stopped accepting new customer applications in some states, but would not confirm whether Louisiana was included on that list.

"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. This is a serious problem impacting our customers and the entire auto insurance industry," a statement from the company wrote.

Hyundai, Kia targeted by car thieves

Some Hyundai and Kia cars and SUVs are missing a "key" anti-theft device, and thieves know. An insurance industry group says these cars are stolen at nearly twice the rate of the rest of the auto industry because their keys lack computer chips for theft "immobilizer" systems.

The thefts apparently started in the Milwaukee area two years ago and spread to multiple Midwest cities and as far away as Colorado and New Mexico after instructional videos appeared on social media.

The Highway Loss Data Institute, a unit of the Insurance Institute for Highway Safety, found that Hyundais and Kias without immobilizers had a vehicle theft claim rate of 2.18 per 1,000 insured vehicle years. The rest of the industry combined had a rate of 1.21. An insured vehicle year is equal to one vehicle insured for one year.

Chip keys, which started to show up in the 1990s, communicate with another chip in the ignition switch. If they match, the engines will start. If they don't match, a thief can't start the engine.

In the 2015 model year, immobilizers were standard on 96% of other manufacturers' models, the institute said. But they were standard on only 26% of Hyundai and Kia models. The carmakers haven't explained their decision to not include immobilizers on some models.

Able to steal with a USB cable

Videos show thieves prying the ignition cover off the Hyundai and Kia vehicles, then using a screwdriver or USB cable to start them and drive away.

All 2022 Kias got immobilizers either at the start of or during the model year. Hyundai said all models produced after Nov. 1, 2021 have immobilizers as standard equipment.

To help prevent theft, owners should roll up windows, lock doors and take the key or fob with them, the National Insurance Crime Bureau says. They should park in well-lighted areas or a garage. If they have to park outdoors, owners should consider installing motion-sensor lights.

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