02/20/2023
Allstate to Stop Writing New Business for Certain Hyundai and Kia Models
The No. 4 auto carrier tells agents it will stop writing new business for 2011-2021 Kia and Hyundai models in nine states to combat losses incurred by an increase in auto theft.
By Varada Bhat, Eva Thomas|February 17, 2023
Allstate is going to stop writing new business for certain Hyundai and Kia models in nine states to combat “recent loss trends.”
Agents were told that starting on Feb. 21, Allstate will not allow new business policies for Hyundai and Kia models that span from 2011 to 2021 and would be applied in Colorado, Delaware, Missouri, Nevada, New Jersey, New York, Ohio, Virginia and Washington, according to an internal memo to agents viewed by P&C Specialist.
In the memo, the Northbrook, Ill.-based insurer called the change “temporary.”
“We’re pausing new coverage of select Kia and Hyundai model years in certain states due to unusually high theft risk. We continue to support existing policies for these vehicles and encourage anyone with questions about their protection options to contact us or their agent,” an Allstate spokesperson told P&C Specialist.
The increase in thefts only added to the strain it has faced in the past year. In Q4 2022, Allstate reported a combined ratio of 109.1%, an increase of 10.2 percentage points from Q4 2021. On Thursday, Allstate reported it had implemented auto rate increases of 9.9% across 13 locations in January, in an attempt to battle high inflation and mounting accidents, as reported.
Joining other carriers
Hyundai and Kia vehicles have been targeted because some models lack electronic immobilizers that prevent thieves from breaking in and bypassing the ignition, according to the Insurance Institute for Highway Safety and Highway Loss Data Institute (IIHS-HLDI).
Among these models, theft claims for Kia and Hyundai were twice as common compared to other manufacturers, reported the IIHS-HLDI. Because the vehicles are so easy to break into, the crime has gained momentum on social media, as reported.
Carriers like State Farm, Progressive and West Bend Mutual have reportedly already stopped writing business for certain Kia and Hyundai models in some states.
New Hyundai software
On Tuesday, Hyundai introduced an anti-theft software upgrade was available for free in more than one million vehicles. The announcement of the upgrade was a direct response to “increasing thefts targeting its vehicles,” Hyundai said in a press release.
The upgrade will first be rolled out to models including 2017-2020 Elantras, 2015-2019 Sonatas and 2020-2021 Venues. For certain 2011-2022 models that cannot “accommodate” the new software upgrade, it is finalizing a program to reimburse drivers for purchasing steering wheel locks, which is another strategy to abate auto theft.
In response to the new Hyundai update, a representative from State Farm told P&C Specialist, it was “monitoring the situation closely and will adjust our approach as appropriate.”
Similarly, in Allstate’s memo to agents, the No. 4 carrier said “updates will be shared when appropriate.”
