HLDI Bulletin - Noncrash fire claim frequencies for Kia ...

Highway Loss Data Institute

Bulletin Vol. 35, No. 40 : December 2018

Noncrash fire claim frequencies for Kia and Hyundai midsize fourdoor cars and SUVs--an update

Summary

In September 2018, the Highway Loss Data Institute (HLDI) conducted a study comparing noncrash fire insurance losses for five specific Kia/Hyundai vehicles with other vehicles of the same size and class (HLDI, 2018a). The study results indicated increased noncrash fire risk for several model years of the Kia Optima, Kia Sorento, Hyundai Sonata, Hyundai Santa Fe, and Santa Fe Sport. Based on discussions with the National Highway Traffic Safety Administration's (NHTSA) Office of Defects Investigation, the engine type was considered as a possible contributing factor for the elevated noncrash fire risk. This study expands on the original study by analyzing noncrash fire claim frequency by engine variant. The model years and vehicles analyzed in this report include the 2011?15 Kia Optima (midsize four-door car), 2011?15 Kia Sorento (midsize SUV), 2011?14 Hyundai Sonata (midsize four-door car), 2011?12 Hyundai Santa Fe (midsize SUV), and 2013?14 Hyundai Santa Fe Sport (midsize SUV).

As shown in the following figure, the 2.0-liter turbocharged engine had the highest average noncrash fire claim frequency (4.2 claims per 10,000 insured vehicle years) followed by the 2.4-liter engine (2.7). Comparatively, the average noncrash fire claim frequency for the control vehicles was only 1.7 per 10,000 insured vehicle years.

Observed noncrash fire claim frequencies for Kia and Hyundai vehicles versus control vehicles by engine type 4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

2.0-liter

2.4-liter

turbocharged engine engine

3.3-liter engine

3.5-liter engine

control group

Introduction

In September 2018, HLDI conducted a study investigating noncrash fire insurance losses for several Kia and Hyundai vehicles. That study was based on a petition by the Center for Auto Safety, which indicated there was a high volume of complaints for the 2011?14 Kia Optima, Kia Sorento, Hyundai Sonata, and Hyundai Santa Fe. HLDI's own analysis found significantly higher noncrash fire claim frequency for several model years of these vehicles.

HLDI shared these results with NHTSA's Office of Defects Investigation. Based on these discussions, it was believed that problems with the engine may be a contributing factor to the elevated noncrash fire risk. This study expands on the prior study by examining noncrash fire claim frequencies by engine type for the affected vehicles.

 Method

Insurance data

Automobile insurance covers damage to vehicles and property in crashes plus injuries to people involved in crashes. Different insurance coverages pay for vehicle damages versus injuries, and different coverages may apply depending on who is at fault.

This study is based on comprehensive coverage. Comprehensive coverage insures against theft or physical damage to insured people's own vehicles that occurs for reasons other than crashes. Losses due to noncrash fires are covered under comprehensive coverage.

Insurance measures

Noncrash fire claim frequency is the number of noncrash fire claims divided by comprehensive exposure, expressed as claims per 10,000 insured vehicle years. Typically, under comprehensive insurance coverage, claim frequency is expressed as claims per 1,000 insured vehicle years. This distinction is made because noncrash fire claims are filed infrequently. Exposure is the length of time a vehicle is insured under a given coverage type and is measured in insured vehicle years. An insured vehicle year is one vehicle insured for 1 year, two vehicles insured for 6 months, etc.

Subject vehicles

Table 1 shows comprehensive exposure, noncrash fire claims, and noncrash fire claim frequency for the five target vehicles by engine type. The examined vehicles include the 2011?15 Kia Optima, 2011?14 Hyundai Sonata, 2011?15 Kia Sorento, 2011?12 Hyundai Santa Fe, and 2013?14 Hyundai Santa Fe Sport. The hybrid versions for both the Kia Optima and Hyundai Sonata were excluded from the statistical analysis due to limited data.

Note that the 2011 Kia Sorento has an existing noncrash fire recall (#10V388000). According to the recall, approximately 35,000 Kia Sorento vehicles were potentially affected.

Table 1: Kia and Hyundai comprehensive exposure, noncrash fire claims count, and noncrash fire claim frequency by engine type

Engine type 2011?15 Kia Optima 2.0-liter turbocharged engine 2.4-liter engine Total 2011?14 Hyundai Sonata 2.0-liter turbocharged engine 2.4-liter engine Total 2011?15 Kia Sorento 2.4-liter engine 3.3-liter engine 3.5-liter engine Total 2011?12 Hyundai Santa Fe 2.4-liter engine 3.5-liter engine Total 2013?14 Hyundai Santa Fe Sport 2.0-liter turbocharged engine 2.4-liter engine Total

Exposure

411,730 1,892,499 2,304,229

436,398 3,617,587 4,053,985

1,686,811 244,852 717,173

2,648,836

347,296 324,533 671,829

241,025 394,948 635,973

Claims

204 537 741

182 982 1,164

435 39 140 614

73 40 113

69 86 155

Claim frequency

5.0 2.8 3.2

4.2 2.7 2.9

2.6 1.6 2.0 2.3

2.1 1.2 1.7

2.9 2.2 2.4

| HLDI Bulletin Vol 35, No. 40 : December 2018

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Two control groups were constructed to accurately measure insurance losses relative to the Kia/Hyundai midsize fourdoor cars and SUVs (Table 2 and Table 3). The control groups consisted of all midsize four-door cars and SUVs manufactured in model years 2011?15, except for vehicles with a documented noncrash fire-related recall. Other gaps in model year availability were due to production either being terminated on certain vehicles or not yet started.

Make Acura Buick Chevrolet Chrysler Dodge Ford Ford Ford Honda Mazda Mitsubishi Nissan Nissan Nissan Toyota Toyota Volkswagen Volkswagen Volkswagen Volkswagen Volvo Total

Table 2: Noncrash fire midsize four-door cars control vehicle population

Series TSX 4dr Verano 4dr Malibu 4dr (NEW) 200 4dr 2WD Avenger 4dr 2WD Fusion 4dr 2WD Fusion 4dr 4WD Fusion hybrid 4dr 2WD Accord 4dr 6 4dr 2WD Galant 4dr 2WD 810/Maxima sedan Altima 4dr Altima hybrid 4dr Camry 4dr 2WD Camry hybrid 4dr CC 4dr 2WD CC 4dr 4WD Jetta hybrid 4dr New Jetta 4dr S40 4dr 2WD (NEW)

Model years 2011?14 2012?15 2011?12,2014?15 2011?12,2014 2011?12,2014 2012, 2015 2012, 2015 2012, 2015 2011?12 2013, 2015 2011?12 2011?14 2011?15 2011 2011?13, 2015 2011?13, 2015 2011 2011 2013 2013 2011

Exposure 344,320 535,166

2,617,380 799,692 636,535

1,502,125 54,271 43,147

2,472,506 210,071 124,217 986,975

5,116,372 15,884

6,018,456 471,175 70,783 1,774 23,616 537,632 23,112

22,605,211

Noncrash fire claims 37 83

600 193 219 228

7 5 293 18 24 243 997 2 768 46 18 -- 3 76 5 3,865

Claim frequency 1.1 1.6 2.3 2.4 3.4 1.5 1.3 1.2 1.2 0.9 1.9 2.5 1.9 1.3 1.3 1.0 2.5 0.0 1.3 1.4 2.2 1.7

Make Chevrolet Truck Chevrolet Truck Chevrolet Truck Dodge Truck Dodge Truck Ford Truck Ford Truck Ford Truck Ford Truck Ford Truck Ford Truck GMC Truck GMC Truck Honda

Table 3: Noncrash fire midsize SUV control vehicle population

Series Captiva sport 4dr 2WD Equinox 4dr 2WD Equinox 4dr 4WD Nitro 4dr 2WD Nitro 4dr 4WD Edge 4dr 2WD Edge 4dr 4WD Explorer 4dr 4X2 Explorer 4dr 4X4 Flex 4dr 2WD Flex 4dr 4WD Terrain 4dr 2WD Terrain 4dr 4WD Accord Crosstour 4dr 2WD

Model years 2013?15 2011?15 2011?15 2011 2011 2014?15 2014?15 2011?12, 2014?15 2011?12, 2014?15 2011?12, 2014?15 2011?12, 2014?15 2011?15 2011?15 2011?12

Exposure 239,701

2,808,220 1,309,862

80,987 84,615 277,271 274,193 818,475 996,453 264,790 115,921 1,205,882 634,803 89,233

Noncrash fire claims 59

350 171 25 21 24 21 110 141 34 16 160 82 14

Claim frequency 2.5 1.2 1.3 3.1 2.5 0.9 0.8 1.3 1.4 1.3 1.4 1.3 1.3 1.6

| HLDI Bulletin Vol 35, No. 40 : December 2018

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Make Honda Honda Honda Hyundai Hyundai Jeep Jeep Jeep Jeep Jeep Jeep Mazda Mazda Mazda Mazda Mitsubishi Mitsubishi Nissan Nissan Nissan Nissan Nissan Nissan Nissan Nissan Nissan Subaru Toyota Toyota Toyota Toyota Toyota Toyota Toyota Toyota Toyota Total

Table 3: Noncrash fire midsize SUV control vehicle population

Series

Model years

Accord Crosstour 4dr 4WD 2011?12

Pilot 4dr 2WD

2011, 2013?15

Pilot 4dr 4WD

2011, 2013?15

Veracruz 4dr 2WD

2011?12

Veracruz 4dr 4WD

2011?12

Grand Cherokee SRT 4dr 4WD 2012?15

Grand Cherokee 4dr 2WD 2015

Grand Cherokee 4dr 4WD 2015

Liberty 4dr 2WD

2011?12

Liberty 4dr 4WD

2011?12

Wrangler 4dr 4X4

2014?15

CX-7 4dr 2WD

2011?12

CX-7 4dr 4WD

2011?12

CX-9 4dr 2WD

2011?15

CX-9 4dr 4WD

2011?15

Endeavor 4dr 2WD

2011

Endeavor 4dr 4WD

2011

Murano 4dr 2WD

2011?12

Murano 4dr 4WD

2011?12

Murano Crosscabrio 4WD 2011?12

Pathfinder 4dr 4X2

2011?15

Pathfinder 4dr 4X4

2011?15

Pathfinder hybrid 4dr 2WD 2014

Pathfinder hybrid 4dr 4WD 2014

Xterra 4dr 4X2

2011?15

Xterra 4dr 4X4

2011?15

B9 Tribeca 4dr 4WD

2013?14

4Runner 4dr 4X2

2011?15

4Runner 4dr 4X4

2011?15

FJ Cruiser 4dr 4X2

2011?14

FJ Cruiser 4dr 4X4

2011?14

Highlander 4dr 2WD

2012?13, 2015

Highlander 4dr 4WD

2012?13, 2015

Highlander hybrid 4dr 4WD 2012?13, 2015

Venza 4dr 2WD

2011?15

Venza 4dr 4WD

2011?15

Exposure 104,685 689,972

1,420,406 61,820 38,073 45,410 124,719 518,946 152,623

588,575 847,080 213,618 19,775 230,437 279,761

10,616 40,833 210,412 352,905 17,186 495,646 650,689

3,105 5,118 77,907 268,761 9,080 335,003 792,926 11,576 217,419 662,648 1,069,878 64,732 333,389 315,633 20,481,767

Noncrash fire claims 13 98 151 6 10 10 12 60 27

131 206

20 9 17 34 1 5 20 44 2 57 94 2 5 22 32 69 2 30 52 83 6 30 23 2,611

Claim frequency 1.2 1.4 1.1 1.0 2.6 2.2 1.0 1.2 1.8 2.2 2.4 0.9 4.6 0.7 1.2 0.9 1.2 1.0 1.2 1.2 1.2 1.4 0.0 3.9 0.6 0.8 0.0 1.0 0.9 1.7 1.4 0.8 0.8 0.9 0.9 0.7 1.3

| HLDI Bulletin Vol 35, No. 40 : December 2018

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Total exposure and noncrash fire claims by model year for the Kia Optima, Hyundai Sonata, and the control vehicles are presented in Table 4. The studied midsize four-door cars and control vehicles totaled 28,963,426 years of exposure and 5,770 noncrash fire claims.

Table 4: Exposure and noncrash fire claims by model year for the Kia and Hyundai midsize four-door cars and control vehicles

Exposure

Noncrash fire claims

Model year 2011 2012 2013 2014 2015 Total

Kia Optima 318,562 450,407 742,114 304,686 488,460

2,304,229

Hyundai Sonata 1,625,601 868,606 1,153,804 405,975 -- 4,053,985

Control vehicles 6,349,026 8,220,170 3,314,967 1,924,003 2,797,046

22,605,211

Kia Optima 139 182 253 72 95 741

Hyundai Sonata 603 260 239 62 --

1,164

Control vehicles 1,086 1,335 514 453 477 3,865

Similarly, total exposure and noncrash fire claims by model year for the Kia Sorento, Hyundai Santa Fe, Santa Fe Sport, and the control vehicles are presented in Table 5. The studied midsize SUVs and control vehicles totaled 24,438,404 years of exposure and 3,493 noncrash fire claims.

Table 5: Exposure and noncrash fire claims by model year for the Kia and Hyundai midsize SUVs and control vehicles

Model year 2011 2012 2013 2014 2015 Total

Hyundai Santa Fe

382,350 289,479

-- -- -- 671,829

Exposure

Hyundai Santa Fe Sport

Kia Sorento

--

964,563

--

546,725

378,528

447,323

257,444

409,333

--

280,891

635,973 2,648,836

Control vehicles 5,081,062 4,233,961 3,568,914 3,526,848 4,070,982 20,481,767

Hyundai Santa Fe

56 57 -- -- -- 113

Noncrash fire claims

Hyundai Santa Fe Sport

Kia Sorento

--

194

--

162

99

118

56

88

--

52

155

614

Control vehicles

733 502 382 490 504 2,611

Analysis methods

Regression analysis was used to quantify the noncrash fire claim frequency differences in a given model year between the engines of study vehicles and the same size and class control vehicles with no records of a noncrash fire-related recall, while controlling for other covariates. The other covariates included calendar year, garaging state, vehicle density (number of registered vehicles per square mile), rated driver age group, rated driver gender, rated driver marital status, deductible range, and risk. Model year was not included as a covariate, as all regressions performed focused on one model year at a time.

Claim frequency was modeled using a Poisson distribution, with a logarithmic link function. For space reasons, only the estimates for the differences in insurance losses for the study vehicles compared with the control vehicle population are shown on the following pages. To illustrate the analyses, the Appendix contains full model results for the noncrash fire claim frequency for the 2012 Kia Optima.

To further simplify the presentation here, the exponent of the parameter was calculated, 1 was subtracted, and the result multiplied by 100. The resulting number corresponds to the difference between the study vehicle and the control vehicles of the same model years. For example, the estimate of the regression parameter for the 2012 Kia Optima with the 2.0-liter turbocharged engine on noncrash fire claim frequency was 1.2738; thus, these vehicles had a claim frequency that was 257 percent higher than the 2012 control vehicles ((exp(1.2738)-1)*100=257).

| HLDI Bulletin Vol 35, No. 40 : December 2018

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