ROCHESTER, N.Y. — Lynn Smith walked from her work to our news car on a rainy Wednesday afternoon.

“How are you?” she asked as she got in the passenger seat.
 
After insurance companies denied her coverage and Smith faced the prospect of losing her license, she sold her 10-year-old KIA Optima. She’s been without a car for eight days.

Berkeley Brean, News10NBC: “So, part of the reason why we’re doing the interview while I’m driving is because this whole situation has left you without a car.”
Lynn Smith: “That part, yes sir.”

In letters to Smith in March, Progressive Insurance declined to offer Smith insurance coverage because of “the make of one of more vehicle(s) is not acceptable for new business.” Smith’s KIA was a 2013.

“I’m out of a car,” Smith said as we drove down Joseph Avenue. “I have to live out of pocket now because the insurance — I can’t afford for a car I owned.”

Brean: “How is it that insurance companies can deny people just because of the kind of car they drive?”
Lynne McChristian, Dir. Office of Risk Mgmt and Insurance Research, Univ. of Illinois: “Well that’s one of the rating factors. They have to take a look at what the car is and what its loss history is.”

Lynne McChristian is the director of risk management and insurance research at the University of Illinois. Last year in Rochester alone, someone stole or tried to steal almost 4,000 cars — and most were KIAs and Hyundais. McChristian says insurance companies are right to consider this.

“There are certain models of cars lately that are claims waiting to happen,” she said.

Michael DeLong, Consumer Federation of America: “It’s a very bad situation and it’s an example of bad behavior by insurance companies.”

Michael DeLong is a researcher for the Consumer Federation of America. He says insurance companies should make decisions based on driving history — tickets, crashes and claims.

DeLong: “We don’t think they should refuse to insure you based on the fact that you have a KIA or Hyundai.”

DeLong says Progressive, Allstate and State Farm are three companies that have refused to insure certain KIAs and Hyundais.

“State Farm has stopped accepting new customer applications in some states for certain model years and trim levels of Hyundai and Kia vehicles because theft losses for these vehicles have increased dramatically. This is a serious problem impacting our customers and the entire auto insurance industry,” said State Farm spokesman Sevag Sarkissian. “We take seriously our responsibility to manage risk and the impact of excess claim costs on all our customers. In this case, it became necessary to take action to protect our policyholders and our business. We are monitoring this situation very closely and will adjust our approach as appropriate.”

In New York State, it’s against the law to deny coverage based on “race, creed, color, disability, gender, marital status or advanced age.” But the state allows insurance companies to make decisions based on specific makes and models.

Brean: “And if an insurance company had just insured you…”
Lynn Smith: “Oh, I would have been fine. We wouldn’t have this conversation.”
Brean: “We wouldn’t be in this car driving and talking about this right now.”
Smith: “Exactly.”

Progressive asked for Smith’s contact information so they could look at her situation again. KIA told Berkeley it is working with insurance companies.

Progressive sent along the following statement:

“We’ve seen theft rates for certain Hyundai and Kia vehicles more than triple and in some parts of the country increase by a factor of almost 20.  Given that we price our policies based on the level of risk they represent, this explosive increase in thefts in many cases makes these vehicles extremely challenging for us to insure at affordable rates. We have continued to insure our existing customers who own impacted models, but to reduce the magnitude of rate increases for our existing policyholders we have limited our sale of new polices.

We understand Hyundai and Kia are making available voluntary software updates to certain vehicles. We’re hopeful this software upgrade will be effective at deterring thefts and strongly encourage our customers and other owners to get them as soon as possible. We are closely monitoring manufacturers’ actions, consumer adoption rates, and the effectiveness of the updates and, if our data supports, we will recalibrate our pricing and acceptance criteria accordingly.“