Benzinga - Two of America's largest car insurers, State Farm and Progressive Corp (NYSE: PGR), are refusing to cover select models of a pair of South Korean automakers in certain U.S. cities. The reason is that they're too easy to steal.
According to data from the Highway Loss Data Institute (HLDI), certain vehicles produced by Hyundai Motor Company GDR (OTC: HYMTF) and Kia Corp from 2015-2019 are roughly twice as likely to be stolen as compared to other vehicles from the same production years.
The reason is that many of them are lacking basic auto theft prevention technology found in most other vehicles produced during those years, according to the HLDI report.
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The institute says some Hyundai and Kia models built between 2015 and 2019 lack electronic immobilizers that prevent thieves from simply breaking in and bypassing the ignition. The immobilizer technology prevents a car engine from starting unless the authorized key is used.
According to the Los Angeles Police Department, Kia, and Hyundai vehicles accounted for almost 20% of vehicle thefts in 2022, up from 13% in 2021 in Los Angeles. Similarly, the Chicago Police Department has reported a 767% increase in Hyundai and Kia vehicle thefts in 2022 compared to the previous year due to a TikTok challenge to steal the vehicles.
The Los Angeles Police Department's Commercial Crimes Division is aware of a recent social media trend regarding vehicle thefts. Please read the attached Community Alert for more information. pic.twitter.com/E5NfRcXVerCNN has reported that both State Farm and Progressive are now avoiding coverage of these cars in certain cities, including Denver and St. Louis.— LAPD HQ (@LAPDHQ) August 26, 2022
"State Farm has temporarily stopped writing new business 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 auto insurance industry," CNN quoted State Firm officials saying.
"During the past year, we've 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," CNN quoted Progressive spokesman Jeff Sibel as saying.
"Given that we price our policies based on the level of risk they represent, this explosive increase in thefts often makes these vehicles extremely challenging for us to insure. In response, in some geographic areas, we have increased our rates and limited our sale of new insurance policies on some of these models," Sibel added.
According to a CNBC report, viral videos on the social media service TikTok depict young teens stealing and driving Kia and Hyundai vehicles. The TikTok challenge, which uses the hashtag "Kia Boys," reportedly has over 33 million views.
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