The Takeaways:
- Design flaws (e.g., lacking electronic engine immobilizers in certain models of Kia & Hyundai) open the product up for theft or other property damages.
- Social media could be a fast contagious source of risk exposures and financial losses if coupled with lax regulations and little screening of posts/clips.
- Insurers can choose not to cover those models in the future, but existing policyholders of comprehensive coverage will still be covered under the current policy.
Owners can shop around for insurance carriers who do write policy for those models, and you can also find government sponsored insurance.
A Case of Youth Offenders Armed by Bad social media.
According to a February 5 report by Cleveland.com, criminal charges were filed in the week before against two 14-year-old Cleveland boys, one of them stole more than two dozen Kia and Hyundai cars that social media essentially unlocked them last summer.
The age of the suspects is not the only thing shocking, as “the number of insured Kias and Hyundais stolen in Cuyahoga County jumped more than 233% from October to December, when 656 cars were stolen in the county. Cleveland alone saw 459 thefts of the two makes in the final month of 2022.”
“The surge is sparked by a viral TikTok video from the so-called Milwaukee Kia Boys that showed how to steal the cars using a USB cable.”
“The technique works because the manufacturers did not install electronic engine immobilizers in models that require a metal key instead of a push-button start, an anti-theft measure that was ‘standard equipment on nearly all vehicles of that vintage made by other manufacturers,’ according to a September 2022 report from the Highway Loss Data Institute.”
The same HLDI report says stealing these vehicles became a social media trend in 2021 as car thieves began posting videos of their thefts and joyrides and even videos explaining how to steal the cars.
More specifically, HLDI released insurance claims data last September that confirmed that some 2015 through 2019 Hyundai and Kia models are roughly twice as likely to be stolen as other vehicles of similar age. Furthermore, these cars don’t have electronic immobilizers that were standard equipment on 96% of vehicles sold for the 2015-2019 model years.
In Chicago, where only 328 Kias were stolen in 2021, more than 3,500 were stolen last year, CBS Chicago reported.
According to Insurance Information Institute or Triple-I, three anti-crime organizations have asked YouTube to take down all videos that teach people how to steal Kia and Hyundai automobiles. The organizations – the National Insurance Crime Bureau (NICB), the Coalition Against Insurance Fraud, and the International Association of Special Investigation Units (IASIU) – made their request in response to a spike in thefts of these vehicles.
Celeste Dodson, president of IASIU, added, “When a vehicle is stolen, it is often not the end of the crime but the beginning. Vehicle thefts are associated with a multitude of criminal activity, including insurance fraud. The cost of these crimes is then passed on to consumers through higher premiums.”
Legal Ramifications
The story does not stop with those cars already stolen, owners of those makes and models are all affected. The aforementioned report by Cleveland.com says that “Progressive and State Farm, two of the country’s largest auto insurers, said in the last week that they have stopped writing new policies for certain makes and models of Kias and Hyundais. And some existing customers in places like Denver and St. Louis have seen their insurance premiums hiked in recent months, news outlets have reported.”
“A Missouri-based attorney filed a lawsuit in federal court in October that seeks class-action status on behalf of owners of the affected Kia and Hyundai models.
“Seattle on Friday sued the manufacturers after that city saw a jump from 48 of those makes stolen in August to 197 in December.
“Asked whether Cleveland would consider such an action, city spokeswoman Marie Zickefoose said, ‘the law department is evaluating options at this time.’”
How Bad social media can impact insurance.
- Spread of misinformation: Social media platforms can spread misinformation about insurance products and services, leading to confusion and mistrust among customers.
- Reputation damage: Negative comments and reviews about insurance companies can quickly spread on social media and harm their reputation. This can lead to a loss of trust and business.
- Cybersecurity risks: Insurance companies that use social media to collect sensitive information from customers may face cybersecurity risks, such as data breaches and hacking. The cases we are talking about here are of this category.
- Regulatory compliance: Insurance companies must comply with strict regulations regarding the use of social media. Misuse of social media, such as making false or misleading statements, can result in legal and financial consequences.
- Negative customer experiences: Insurance companies that use social media to process claims or respond to customer complaints may not always provide the level of customer service that customers expect. Negative customer experiences can be amplified on social media and harm the reputation of the insurance company.
Are Kia and Hyundai Owners Out of Luck?
If you’re a current owner of a Kia or Hyundai from those vulnerable model years, don’t worry if you bought a comprehensive coverage for your auto, which typically cover theft of a vehicle, including a Kia or Hyundai model without an electronic engine immobilizer.
Comprehensive insurance is a type of auto insurance coverage that protects against damage to your vehicle that is not caused by a collision. This includes theft, vandalism, fire, and natural disasters.
However, the exact coverage and details of a comprehensive insurance policy can vary depending on the insurance company and policy terms, so it’s important to review your policy documents or speak with your insurance provider to understand what is covered and what is not.
If you recently bought a secondhand Kia or Hyundai of those model years, even though some insurance companies won’t issue policy for your auto, you can still do your research and shop around to find insurance carriers that do provide coverage for your model.
You can also check with your local Kia or Hyundai dealership to see if they have any recommendations for insurance providers that offer coverage for their cars.
Additionally, you may be able to find coverage through a government-sponsored insurance program or a specialty insurance provider.