Hyundai and Kia face new trouble over car thefts, insurance companies sue OEMs

The rising cases of vehicle thefts, particularly Hyundai and Kia cars, over the last few months, have become a major headache for the South Korean auto major, as it directly points out the vulnerability of the models of these two OEMs. Now, both automakers from the same automobile group are facing another serious trouble, as dozens of insurance companies have filed a lawsuit against them, demanding reimbursement for repairing or replacing Hyundai and Kia cars.

The Hyundai and Kia cars' theft spree started as a social media stunt in 2022. Some Hyundai and Kia models sold in the US until 2021 have not been fitted with an engine immobilizer. This allowed the crooks to use a simple USB cable to start the specific models and drive off. The theft spree hurt Hyundai and Kia's reputations and impacted their sales numbers as well. The insurance companies too, started avoiding providing insurance coverage for these specific models, leaving the consumers with an even bigger problem. Automotive News reports that 69 insurance companies in the US have paid out $190 million so far for the stolen Kia and Hyundai vehicles and are estimating a total payout of more than $300 million. With this situation in hand, these 69 insurance companies have filed a lawsuit against Hyundai and Kia, demanding compensation for the money they have paid to the affected vehicle owners.

The report also claims that the social media-driven car theft spree might end up costing the US insurance industry up to $600 million because 8.3 million vehicles made by the two carmakers lack an engine immobilizer. This huge number comprises 3.8 million vehicles from Hyundai and 4.5 million from Kia.

Hyundai, in response to this lawsuit, has said that this litigation is unnecessary. "A subset of Hyundai vehicles on the road in the US today — primarily 'br trim' or entry-level models — are not equipped with push-button ignitions and immobilizing anti-theft devices. It is important to clarify that an engine immobilizer is an anti-theft device, and these vehicles are fully compliant with federal anti-theft requirements," said the auto company.