Judge Rules Hyundai and Kia Must Face Insurers in Court Over Theft Epidemic

Theft Epidemic Sparks Legal Battle Between Automakers and Insurers

Remember when Hyundai and Kia models were being stolen left, right, and center due to a TikTok-inspired theft epidemic? While the scandal may have disappeared from news feeds, American insurers are determined to hold the automakers accountable for the losses they incurred. Thanks to a recent judge’s decision, insurers are now getting their day in court.

Judge Rejects Automakers’ Attempt to Dismiss Litigation

U.S. District Judge James Selna has rejected efforts from Kia and Hyundai to dismiss litigation by hundreds of insurers seeking to recover over $1 billion in losses caused by the theft craze. The judge dismissed the automakers’ arguments that it was unfair to allow insurers to recover costs since they had collected premiums and assumed theft risks.

Lack of Anti-Theft Technology Leads to Automakers’ Liability

Judge Selna found sufficient evidence that the lack of adequate anti-theft technology on more than 14 million Kia and Hyundai cars built between 2011 and 2022 could have predicted the theft problem. He dismissed the automakers’ counter arguments, stating that the level of fault is almost entirely on the defendants. This ruling paves the way for insurers to seek compensation for their losses.

Failure to Equip Cars with Anti-Theft Measures

Kia and Hyundai’s failure to equip their cars with electronic immobilizers left them vulnerable to theft. Instructional videos demonstrating how to steal these vehicles spread rapidly through social media, inspiring copycat car thieves. In response, the automakers distributed physical anti-theft devices to drivers, but reports have emerged of cars being stolen even after receiving a software security update.

Preliminary Approval Granted for Class Action Settlement

Judge Selna has already granted preliminary approval for a class action settlement that covers over 9,000 affected vehicles. Under this settlement, the automakers may be required to pay $200 million, with a significant portion going to the affected drivers.