Dozens of insurance companies have filed a lawsuit demanding reimbursement for the costs of repairing or replacing Hyundai and Kia vehicles after a theft spree that started as a social media stunt last year.
As previously reported, some Hyundai and Kia models sold in the United States until 2021 have not been fitted with an immobilizer, allowing crooks to use a simple USB cable to start the car and drive off.
However, thieves first need to get inside, which usually means breaking a window and messing with the interior trim, and now insurance companies want to be paid back by Hyundai and Kia for everything they've spent on repairs and cars that have been stolen and couldn't be recovered.
According to Automotive News, Liberty Mutual, Nationwide, American Family, and 65 other auto insurers, which comprise only a fraction of the country's insurance companies, have paid out $190 million so far and are estimating a total payout of over $300 million.
In total, it's said that the social media-driven crime wave might end up costing the US insurance industry up to $600 million, seeing how 8.3 million vehicles made by the two car brands lack an engine immobilizer: 3.8 million from Hyundai and 4.5 million from Kia.
As per the lawsuit, which was filed at the US District Court in Orange County, California in March, replacing windows and repairing steering columns after an attempt to break into a vehicle and hot-wire its ignition often costs an insurer more than $3,000.
The court case adds that if the vehicle was taken on joyrides or used to damage public property, the costs for the insurance company rise to over $10,000, while a total loss can be as much as $20,000.
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The National Highway Traffic Safety Administration (NHTSA), which enforces vehicle safety standards in the US, does not require a starter system to use an immobilizer specifically. At the same time, Hyundai released a statement saying that “this litigation is unnecessary.”
"A subset of Hyundai vehicles on the road in the U.S. 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."
However, the lawsuit says that customers could get theft-prevention options only if they bought "expensive trim packages having nothing to do with vehicle safety requirements." Moreover, it adds that any disclosure of the lack of an immobilizer was buried in charts that "consumers generally do not receive, read and/or understand."
In February, Hyundai and Kia released a software update for the affected vehicles, which activates an "ignition kill" feature after locking the doors. Also, the length of the alarm sound has been increased from 30 seconds to one minute, and owners will have to use the fob to unlock the vehicle to make the key start the engine.
The cars in question are certain 2011 to 2021 models with a “turn to start” ignition.
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