Hyundai, Kia Sued by Dozens of Insurance Companies in US Due to Increase in Vehicle Theft

After a theft spree last year that began as a social media hoax, dozens of insurance companies have filed suit seeking compensation for the expenses of replacing or repairing Hyundai and Kia cars.

The increasing number of thefts of Hyundai and Kia vehicles over the last several months has become a serious problem for the South Korean automaker, for it highlights the inherent weakness of these makes and models. Another major problem for Hyundai and Kia comes in the wake of the fact that several insurance firms have filed lawsuits against them seeking compensation for the cost of fixing or replacing Hyundai and Kia vehicles. In 2022, the theft spree of Hyundai and Kia vehicles began as a stunt on social media. Some Hyundai and Kia cars marketed in the United States through 2021 were missing an engine immobiliser. The robbers were able to start the targeted models and flee by using a standard USB cord. Hyundai and Kia's reputations and sales have suffered as a result of the theft spree.

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Why are Insurance Companies suing Hyundai & Kia?

Another issue that customers now face is that insurance companies have begun avoiding covering these devices altogether. According to sources, 69 insurance firms in the US have paid out a total of $190 million for the stolen Kia and Hyundai cars, and they are expected to pay out more than $300 million in total. Consequently, the 69 insurance firms have launched a lawsuit against Hyundai and Kia to recover the money they had paid out to policyholders.

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Hyundai & Kia's Solution

A software update was released in February by Hyundai and Kia for the affected cars, which triggers an 'ignition kill' mechanism when the doors are locked. In addition to the key being required to start the engine, owners will also need to use the fob to unlock the car. The alarm will now ring for a full minute.

You may be wondering why Hyundai and Kia did not issue a widespread recall. Probably because the manufacturer anticipated that the addition of immobilisers would cost USD 5 billion. And it would be cheaper to pay off unhappy insurance companies than fixing the issue or compensating the affected customers.

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