Thefts spur State Farm, Progressive to stop insuring some automobiles

Progressive and State Farm will no longer issue insurance policies for select Hyundai and Kia vehicles due to a rise in thefts among the vehicles, the insurers confirmed this week.

But what about other insurers? And what will happen to car owners who have these vehicles but are already insured?

Here's what we know so far:

Why is State Farm ceasing to insure some Kias and Hyundais?

State Farm has temporarily stopped accepting new customer applications in some states for select model years and trim levels of Hyundai and Kia vehicles, the company said in a statement to USA TODAY.

The company said theft losses for the cars have dramatically increased and called it a "serious problem impacting our customers and the entire auto insurance industry."

The company said it is responsible for managing risk and the impact of excess claim costs for its customers. State Farm's halt on Hyundais and Kias is part of its plan to protect both the business and its policyholders, the company said.

How is Progressive handling

Kia and Hyundai vehicles?

Progressive has seen a rise in theft rates for certain Hyundai and Kia vehicles, the company said in an emailed statement. In some areas, the vehicles are almost 20 times more likely to be stolen than other vehicles.

The company called the theft increases "explosive" and said its policies are based on the level of risk they represent, so insuring the vehicles is "extremely challenging."

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 read.

What's wrong with the vehicles?

The problem with these vehicles is they're pretty easy to steal and thefts have been on the rise among both car manufacturers.

Police think the rise in thefts among Hyundais and Kias is in part due to a social media trend where users demonstrate how to start the cars without using keys. The thefts are mainly among Kia cars newer than 2011 and Hyundai cars newer than 2015.

The Highway Loss Data Institute reviewed 2021 insurance claims and found that among 2015-19 vehicles, theft claims were nearly twice as common for Hyundai and Kia vehicles than all other car manufacturers.

The institute thinks it's because the companies sell vehicles that don't have electronic immobilizers to prevent thieves from taking them. People are able to break in and bypass the ignition, the institute said.

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, the institute said.

A spokesperson for Hyundai said engine immobilizers are now standard on all the company's vehicles produced as of November 2021.

Which models, years and cities

are affected?

Kia said in a statement that impacted vehicles include those built between 2011 and 2021. The impacted vehicles have a steel key to "insert and turn to start" the ignition.

A spokesperson for Hyundai didn't specify which years are impacted.

Neither company listed states that will be affected but CNN reported the companies have stopped offering insurance on vehicles in Denver and St. Louis.

Are other insurance companies dropping Hyundais and Kias?

Progressive and State Farm have stopped issuing policies for select Hyundais and Kias but what about other major insurance companies such as Geico, Allstate, USAA, Liberty Mutual, Farmers, Travelers, Nationwide and American Family?

Other companies did not immediately respond to requests for comment on the matter.