BALTIMORE — Kia and Hyundai drivers now have a free way to protect their cars. The automakers released a security software update in response to a social media trend showing how certain models can easily be stolen. But aside from worrying about their cars being taken, drivers now say they’re running into issues with their insurance companies.
The Maryland Insurance Administration recently put out a consumer alert and bulletin making it clear that under state law, insurance companies cannot deny these drivers coverage.
The regulatory agency does not see any legitimate business or economic purpose for rendering all or any subset of Hyundai and Kia vehicles as wholly ineligible for motor vehicle liability coverage in Maryland.
The MIA issued these alerts following media reports of some insurance companies refusing to write a policy for these vehicles in some states.
Mary Fox encountered this situation after purchasing a 2017 Hyundai Accent.
“I found the car that I thought was perfect for me, went and test drove it, and when I got home that night, I discovered that my insurance company would not add it to my policy,” said Fox.
She received a letter from her carrier stating their “program was not designed to insure this type of vehicle.”
The dealership then connected Fox to other carriers who would.
“But the quotes that came in were $800 and $1800 more than I would've paid if I were with my current policy,” Fox said.
Fox asked to cancel the sales contract. The dealership originally told her no, so she contacted WMAR-2 News Mallory Sofastaii for help.
“I sent them a print screen of an email indicating that I was going to be meeting with WMAR and I suggested to them I would like to resolve this issue before I meet with the news station, and then the manager called me to cancel the contract,” said Fox.
MIA Commissioner Kathleen Birrane said it shouldn’t have come to that.
“An insurance company cannot simply refuse to write the Kia and Hyundai models that have been subject to these social media challenges,” said Birrane.
WMAR-2 News contacted Fox’s insurer. In an email, a spokeswoman with The Hartford wrote:
"For a short time, we temporarily paused issuing new coverage for Kia and Hyundai vehicles, which we have since resumed now that car manufacturers are starting to address the problem. We empathize with our customers who have been challenged by the rapid increase in thefts of Kia and Hyundai vehicles. This is a concern for us and the auto insurance industry. For the benefit of all our policyholders, as this issue emerged, we took steps to avoid increasing our current exposure to this known and growing risk."
Jasmine Ikard encountered issues with her insurance policy when someone tried to steal her 2017 Hyundai Elantra.
On January 29, she noticed her car lights on, the door open, and the steering column cover on the floor.
“Someone tried to take it because of the Tik Tok trend,” said Ikard. “I couldn’t turn off my lights, couldn't lock my vehicle, couldn't do anything. The key wouldn't even fit in the ignition anymore.”
She believes thieves targeted her car because of a security weakness in certain 2011 through 2021 Kia and Hyundai models. Some lack immobilizers, an antitheft device that according to the Highway Loss Data Institute have been successful in reducing theft losses, but in a study by the nonprofit research organization, Kia and Hyundai trailed other manufacturers in adding immobilizers as standard equipment. For 2015 models, passive immobilizers were standard equipment on only 26 percent of Hyundai and Kia vehicle series, compared with 96 percent of vehicle series for all other manufacturers combined, according to the HLDI report. And in the first half of 2022, theft claims for these particular models and brands were more than double all other manufacturers combined.
Ikard notified her insurance company about the attempted theft, then learned there was an issue with her claim.
“They told me that my services were temporarily disabled because they wanted to send the case to the Special Investigations Unit because they suspected fraud,” Ikard told Sofastaii.
“What did you think about that?” Sofastaii asked Ikard.
“I felt like it was insane. I’m reaching out to you all for help, I pay this cost monthly to Geico for my insurance, and now I can’t get the help when I actually need it,” Ikard responded.
Ikard remembers a manager telling her that the claim had been flagged because of the social media challenge.
WMAR-2 News reached out to Geico. A spokesperson responded that it's normal for an insurance company to hold an investigation, but they concluded it and were handling the claim.
“I really think if you hadn't of reached out to Geico for a statement, I know this wouldn't of been resolved, I know it wouldn't have. I think the turnaround was that same day,” Ikard told Sofastaii.
The MIA is encouraging anyone who has issues with their insurance claim to file a complaint with the agency.
And while an insurer cannot deny coverage for these cars, they could potentially raise their rates.
“I don’t see a large influx of increased rates at this point, but I can tell you there are carriers who have reached out to us to say they are contemplating a factor that would cause rate increases to these vehicles,” said Commissioner Birrane.
Birrane did not specify which carriers.
WMAR-2 News asked The Hartford and Geico if they’re considering raising rates for these drivers.
The Hartford spokeswoman responded: “Our statement is the extent of our comment.”
Geico Corporate Communications did not respond to multiple emails seeking information on how policy holders with these cars will be impacted.
Fox worries that any price increase could put these economical cars out of reach for consumers unable to afford additional costs.
“This isn't going to affect a Lexus buyer, and the Mercedes buyer, this is going to affect a mom with three kids who has to get her kids back and forth to school and work. That's who it's going to affect,” said Fox.
If a consumer receives notice of a rate increase, the MIA can evaluate their policy, speak with the carrier, and make sure they’re in compliance with Maryland law. To contact the MIA, click here.
And before the new software security update became available, Hyundai offered a custom security kit with installation costing drivers hundreds of dollars. Ikard was quoted nearly $1,000.
WMAR-2 News asked Hyundai if they plan to reimburse the customers who paid for the kit before the free security update was available. A spokesperson responded, “Not at this time, but we will continue to evaluate all options to support our customers.”
Different police departments are also offering free steering wheel locks to further deter any theft. Click here more information on the program available to Baltimore County residents.