More than 60 insurance companies across the United States are suing Hyundai, claiming significant financial losses due to a surge in thefts of Hyundai and Kia cars.
The damages due to car thefts are estimated to be as much as $600 million.
The U.S. District Court for the Central District of California confirmed that on April 12, 68 companies from 10 insurance groups filed a class-action lawsuit against Hyundai Motor America, seeking damages from the increase in vehicle thefts.
A case management hearing for the class action is scheduled for May 15 in federal court in Santa Ana.
Plaintiffs’ counsel, Cozen O’Connor, stated in the complaint that six insurance groups have been added to the list of plaintiffs since the court filing.
All named plaintiffs are insurers who paid claims to policyholders in connection with the theft of Hyundai and Kia vehicles.
According to the complaint, defendants Hyundai and Kia violated regulations such as FMVSS 114, the standard for providing an exterior warning sound, by failing to equip their vehicles with anti-theft devices.
This violation resulted in a dramatic increase in vehicle thefts. While Hyundai has since provided anti-theft software and other measures, plaintiffs’ attorney Nathan Dooley said that “the problem was already widespread. The cars have already been stolen, and the insurance claims have been paid.”
The complaint also lists specific damage costs that insurers have suffered to date. “The insurance companies already named as plaintiffs, as well as the additional companies named, have paid out $300 million in claims to date,” the plaintiffs said.
“If one were to estimate what the entire insurance industry has paid or will pay in the future, a reasonable estimate of total damages would be approximately $500-600 million.”
If the plaintiffs’ claims are accepted, Hyundai and Kia could face a significant payout in the future, as the $500-600 million figure is net of punitive damages, attorneys’ fees, etc.
Insurers are raising premiums as a result of the spike in thefts of Hyundai and Kia vehicles. Roy Kim, a manager at Heo Geun Insurance Agency, stated that “if a person who used to drive a Toyota Camry switches to a Hyundai Sonata or Kia K5, their insurance premiums will increase by about 10-15%.” In some regions, major insurance companies such as State Farm and Progressive have refused to insure Hyundai and Kia vehicles without anti-theft devices.
On April 27, New York State Attorney General Letitia James issued a consumer alert about the spike in Hyundai and Kia car thefts. At a press conference, Senator Jeremy Cooney announced that “Hyundai and Kia car thefts have become an epidemic.”
BY YEOL JANG [support@koreadaily.com]
