Amid theft spike, owners of Kias and Hyundais are being denied insurance
CHICAGO (CBS) -- We've told you about the way thieves have been targeting certain models of Kias and Hyundais around Chicago – there were nearly a dozen more such thefts this past weekend alone.
Now, the owners of those Kias and Hyundais have another headache to deal with – some major insurers won't take them as customers.
Late Monday, State Farm confirmed they are not writing policies for Kia and Hyundai owners in some states. As CBS 2's Sara Machi found out, you might be impacted even if your car is not one of the target models.
With three decades in the insurance business, it's not often Lakeview Insurance President Brian Konen sees something new.
"Initially, I think it was a little bit, hey what's going on?" Konen said at his Southport Avenue office Monday.
But while running quotes for a customer last week, indeed Konen did see something new. He had heard some major insurers were making a major change – but then he saw it happen firsthand.
"That's when they basically kind of came out last week – specifically, one in particular said, 'Hey, we're not doing this in the city of Chicago specifically until this issue gets resolved,'" Konen said.
Some insurers are no longer offering new policies to cover the Kias and Hyundais hit most often by thieves.
We've showed you how thieves break into the steering columns on certain models without engine immobilizers. They take the cars and trash them, leaving behind big repair bills.
Data from Chicago police show Kias and Hyundais made up 38 percent of motor vehicle thefts last year.
"This is highly unusual. I'm in the business 15-plus years, and I was trying to figure out if there was a precedent for this," said Michael Barry, chief communications officer of the Insurance Information Institute, "and I couldn't immediately come up with one."
Barry with the Insurance Information Institute says the Kia and Hyundai thefts are just one of the many issues insurance companies are balancing right now. Repairs are more expensive. Parts in short supply. Some of those costs are being spread to other customers.
Lynn Pearson says her insurance went up more than $200 a year.
"I was shocked. I'm like, oh my God. What is going on here?" Pearson said. "I don't know those vehicles, so why am I being penalized for it?"
It is something agents like Konen say is unlikely to reverse in the short term - especially since more insurers may take note.
"Right now, I think it's only a handful of carriers," Konen said, "but like a lot of things in our industry once you have a few, the rest are paying attention, and might follow."
This is the official statement from State Farm:
"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.
"We take seriously our responsibility to manage risk and the impact of excess claim costs on all our customers. In this case, it became necessary to take action to protect our policyholders and our business.
"We are monitoring this situation very closely and will adjust our approach as appropriate.
For information on auto theft, we recommend reaching out to the Insurance Information Institute and the National Insurance Crime Bureau."
A spokesman for Progressive also issued a statement, though the insurance company did not confirm the practices it described are happening in Chicago or elsewhere in Illinois.
"Progressive is committed to providing affordable insurance solutions. 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. Given that we price our policies based on the level of risk they represent, this explosive increase in thefts in many cases 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.
"We continue to ensure existing customers who own these types of vehicles, however, have taken steps to communicate this elevated risk to them and provide them with tips to try and prevent their vehicles from being stolen. 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 Illinois Department of Insurance released this statement in response to our questions about Kias and Hyundais not being insured:
"The Illinois Department of Insurance has not received consumer complaints about the subject of your inquiry. However, the Department takes seriously its role to protect insurance consumers and investigate complaints about the claims and billing practices of insurance companies under the regulatory authority of IDOI. We are aware of this issue and in communication with the company.
"If a consumer believes that an insurance company is violating the terms of insurance coverage, the consumer can file a complaint with the Department and find more information about the complaint process here."
Meanwhile Monday, Chicago Police released a community alert about a new rash of Kia and Hyundai thefts over the weekend in the Near West (12th) police district. In each incident, the thieves broke a window to get into the cars, then used a screwdriver to pop off the column and a USB cable to start the car and drive away.
The latest thefts happened at the following times and locations in West Town, the West Loop, the Near West Side, and Pilsen:
· 600 block of North Wood Street, 10 p.m. Sunday.
· 700 block of South Ada Street, 7 p.m. Sunday.
· 300 block of North Ogden Avenue, 4:30 p.m. Sunday.
· 500 block of North Marshfield Avenue, 3 p.m. Sunday.
· 3100 block of West Fulton Street, 5 a.m. Sunday.
· 0-99 block of North Paulina Street, 4:35 a.m. Sunday.
· 1600 block of West Chicago Avenue, 6:45 p.m. Saturday.
· 1300 block of West Grand Avenue, 1:25 p.m. Saturday.
· 2200 block of West Superior Street, 5:45 a.m. Saturday.
· 200 block of North Racine Avenue, 1:30 a.m. Saturday.
· 2100 block of West 21st Street, 1 a.m. Saturday.
Anyone with information on these latest Kia and Hyundai thefts should call Area Three detectives at (312) 744-8263.
