Some companies refusing to cover certain Hyundai, Kia car models: Here's the reason why

PHOENIX - Phoenix drivers are feeling the impact of issues affecting certain Hyundai and Kia models.

Already, several auto insurers are refusing to cover some of the two car brand's models, and some drivers are seeing insurance rate increases.

Here's what you should know.

What's happening with Hyundai and Kia cars?

(Related Video) Attorneys General demand recall of some Hyundai and Kia vehicles

Attorneys general in several states are demanding a recall of some cars made by Hyundai and Kia, due to a rise in car thefts that stems from a security issue with ignition switches.

According to the Associated Press, a security flaw that was exposed on social media has led to an epidemic of thefts targeting some of the two car brand's vehicles.

"Videos on TikTok and other sites that illustrate how to start and steal Kia and Hyundai models — using only a screwdriver and a USB cable — have allowed the thefts to spread across the nation since late 2021," read a portion of the article.

According to the Highway Loss Data Institute, 2015 to 2019 Hyundai and Kia cars and SUVs were twice as likely to be stolen than other vehicles of the same age.

In April, it was reported that due to the rash of thefts, officials with 17 states urged the federal government to recall the affected cars.

Why are Hyundai and Kia cars targeted?

The companies’ affected cars, many of them lower-cost models from the 2011 to early 2022 model years, were not equipped with a theft immobilizer.

What are theft immobilizers?

The device contains a computer chip in the key that must be recognized by another chip in the steering column before the engines will start.

Though most automakers have had the chips for years, Hyundai and Kia have lagged behind the industry as a whole in installing them on many models, thereby allowing thieves to exploit the security gap.

In the 2015 model year, immobilizers were standard on 96% of other manufacturers’ models but on only 26% of Hyundai and Kia models, the Insurance Institute for Highway Safety said.

Why are both Hyundai and Kia car models affected?

Hyundai and Kia, according to the AP, are part of the same South Korean corporate family.

According to an article by CNET in 2015, South Korean press refer to Hyundai Motor Group, along with three other companies including Samsung and LG, as being among the biggest class of Korean conglomerates that are known as chaebols. Kia is listed on Hyundai Motor Group's website as one of their affiliates, and they share a lot of their engineering.

Why are insurance companies refusing to insure some Hyundai and Kia models?

Some companies are reportedly refusing to insure some Hyundai and Kia models, because they were deemed ‘'too easy to break into.'

There are also reports that some insurance companies are raising insurance premiums for certain Hyundai and Kia models. That was something Tiffany Appel experienced.

"October of last year, then April of this year, it went up a little over $120 a month in premiums," said Appel.

Appel switched insurance for lower price, but that company eventually dropped her coverage.

"They said based on the vehicle information provided, we are unable to provide your customer a policy at this time due to high theft rates for one or more of your vehicle year make and model," said Appel.

Appel said she feels like she is being punished for being responsible drivers.

"We didn’t do anything wrong. We have a great driving record," said Appel.

What is Hyundai/Kia doing to reduce the theft risk?

In mid-February 2023, Hyundai and Kia unveiled software that was designed to thwart the thefts.

However, safety authorities say the companies’ software rollout has been far too slow. Of the 4.5 million Kia vehicles that are eligible for the fix, the automaker says it’s installed the software on about 210,000 — nearly 5%. Kia says it has sent notifications to about 2.8 million of the affected owners and expects to have notified all of them by the end of May.

For Hyundai, the figure is about 225,000 out of 3.8 million vehicles — roughly 6%. Hyundai said they expected to have contacted all the affected vehicle owners by May 18.

What are the car models covered by the software upgrade?

In May, the AP released a list of vehicles covered by the software upgrade:

Hyundai

2018-2022 Accent
2011-2022 Elantra
2013-2020 Elantra GT
2018-2022 Kona
2013-2022 Santa Fe
2013-2018 Santa Fe Sport
2019 Santa Fe XL
2011-2019 Sonata
2011-2022 Tucson
2012-2017 and 2019-2021 Veloster
2020-2021 Venue
2013-2014 Genesis Coupe
2020-2021 Palisade.

Kia

2011-2022 Sportage
2011-2020 Optima
2011-2022 Sorento
2011-2021 Forte
2020-2022 Soul
2012-2021 Rio
2011-2021 Sedona
2021-2022 Seltos
2021-2022 K5

For customers with vehicles that cannot accommodate the software upgrade, the agreement will provide a reimbursement of up to $300 for anti-theft devices.

Is there a lawsuit over this?

Yes, and there's already a settlement that was agreed upon.

On May 19, the AP reported that Hyundai Motor America, along with Kia America, have reached a settlement to resolve a class-action lawsuit over the theft matter.

The settlement could be valued at $200 million and covers about 9 million affected cars, the companies said.

What will the settlement cover?

The settlement will provide cash compensation to customers who suffered theft-related losses or damage not covered by insurance — as well as reimbursement for insurance deductibles, increased insurance premiums and other losses, Kia and Hyundai said.

Officials with both companies say they have also given impacted customers tens of thousands of free steering wheel locks through local law enforcement and direct shipments.

The proposed settlement is expected to be reviewed in court for preliminary approval in July.

"We appreciate the opportunity to provide additional support for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles," said Jason Erb, Hyundai Motor North America’s chief legal officer, in the AP article.

I have a car that's affected, and I'm having problems with insurance. What should I do?

On May 22, we spoke with James McGuffin with the Arizona Department of Insurance and Financial Institutions on what people should do under these circumstances.

"One insurer is not covering it, that doesn’t mean that all of them are not covering them," said McGuffin. "Price shopping, policy shopping is a good idea."

McGuffin said those who own cars affected by this problem should get the security enhancement as soon as possible by heading to their car dealership.

"Also in the interim, it's always a good idea to park the car smart. Do everything you can not to have it stolen or broken into,:" said McGuffin.

The Associated Press (AP) contributed to this report.