The Michigan Department of Insurance and Financial Services is the latest department to issue a bulletin addressing insurers refusing to provide coverage for certain model Kia and Hyundai vehicles because of increased thefts of those models. The bulletin reminds insurers that they are required to offer coverage to all "eligible persons" and that failing to do so may result in a violation of the Essential Insurance Act.
The insurance code MCL§ 500.2118 specifically prohibits insurers from refusing to insure, refusing to continue to insure, or limiting coverage available to eligible persons except as specified in Section 2118. The bulletin references section 2118 (2)(e) which reads as follows:
(e) Type of vehicle insured or to be insured, based on 1 of the following, without regard to the age of the vehicle:
(i) The vehicle is of limited production or of custom manufacture.
(ii) The insurer does not have a rate lawfully in effect for the type of vehicle.
(iii) The vehicle represents exposure to extraordinary expense for repair or replacement under comprehensive or collision coverage.
These exclusions do not apply to the issue at hand; an insurer may not refuse to insure, refuse to continue to insure or limit coverage to an eligible person based on national theft trends or the lack of anti-theft technology on any given vehicle.
Consumers are advised to contact the department if they have been denied auto insurance based on owning a particular model Kia or Hyundai. Questions may be directed to the department as follows:
Department of Insurance and Financial Services Office of Research, Rules, and Appeals 530 W. Allegan Street – 8th Floor P.O. Box 30220 Lansing, Michigan 48909-7720 Toll Free: (877) 999-6442
A copy of the bulletin may be found here. Other states that have issued similar bulletins are as follows:
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.