Hyundai, Kia Engine Fires Class Action: $1.3 Billion Settlement Given Final Approval

In October 2019, we brought you the news that Hyundai and Kia agreed to pay as much as $758 million to settle years-old class action litigation over engine fire concerns plaguing a number of vehicle models.

After a hearing on May 10, however, eligible drivers stand to recover much more, as a federal judge granted final approval to a nationwide settlement valued at $1.3 billion. The settlement covers drivers’ out-of-pocket repair expenses, software updates, goodwill payments and lifetime warranty extensions for nearly four million Hyundai and Kia vehicles. The bulk of the settlement, court papers state, covers the expense of the lifetime warranties.

Let’s get into all of it. And, if you haven’t visited the official settlement website yet, you can find it right here: https://www.kiaenginesettlement.com/.

When do I need to file a claim by?

According to the settlement website, the deadline by which “class members” – that is, those covered by the deal – must file claims is 90 days from the date of final approval, which was granted on May 10. The deadline by which drivers had to submit “most claims for reimbursements,” however, was April 12, 2021.

You can file a claim and find the appropriate deadlines right here.  

To receive any other benefits from the settlement, Hyundai and Kia drivers must submit a claim form.

Dollars and cents

Initial reports valued the total settlement at as much as $758 million. In a 47-page final approval order for the deal, however, United States District Judge Josephine L. Staton noted that the parties, after submitting their motion for preliminary approval last November, provided to the court a supplement that included “updated calculations” based on the most recent claim information provided by Hyundai Motor America and Kia Motors America.

The automakers’ new calculations, which were based on actual claims filed by drivers covered by the settlement through October 2020, valued the settlement at $1,305,396,814. The relief offered through the settlement—broken down in detail below—is described in the final approval order as offering consumers “virtually everything Plaintiffs hoped to recover through the litigation,” in addition to providing for a “robust direct notice plan,” which has already been executed for drivers covered by the deal. One component of the settlement, the installation of updated knock sensor detection system (KSDS) technology, has already been completed on more than 80 percent of the vehicles covered by the deal, the approval order says.

The approval order, citing an expert-compiled report, includes the following breakdown of the $1.3 billion deal:

Other components of the settlement not calculated upon final approval include the value of the rebate program and cost of administration and notice programs.

Prior to final approval, a wrinkle in the proceedings that “concerned” Judge Staton was Hyundai and Kia’s denial of thousands of claims submitted to the settlement administrator. The judge wrote that while the court has some concerns about the denial rate, the issue does not make the settlement unfair, inadequate or unreasonable.

According to the parties handling the settlement talks, many of the claims denied by Hyundai and Kia did not claim a “class vehicle,” i.e., one of the models covered by the deal, or, more commonly, lacked the required documentation; many claimants, the approval order states, often failed to provide the requested paperwork even after receiving a written request for it.

Drivers whose claims were denied by Hyundai and Kia should know that they may seek a review of their denial through Better Business Bureau-administered alternative dispute resolution, and that the proceedings will be paid for by the automakers unless the claim is brought “in bad faith.” The court stressed that it will seek an update regarding claims submitted to Hyundai and Kia to ensure the companies are not denying claims unreasonably or in bad faith. Lastly, the court, in light of the high denial rate, requires that drivers be adequately informed of their right to arbitrate the denial of their claim if necessary.

If you have questions regarding your claim, contact information for the settlement administrator can be found here.

Lifetime warranty coverage

As the bulk of the settlement funds are to cover lifetime warranty coverage for nearly four million vehicles, the final approval notice gets into detail on exactly what this means. Specifically, according to court documents:

All Class Vehicles ‘owned by individual consumers that have completed the KSDS update’ are eligible to receive a Lifetime Warranty. … The Lifetime Warranty covers all costs associated with inspections and repairs, including, without limitation, the costs associated with replacement parts, labor, diagnoses, and mechanical or cosmetic damage to the Class Vehicle caused by the engine malfunction (e.g. engine failure or fire).”

Class members must schedule an appointment to update their Hyundai or Kia’s KSDS within 60 days of the mailing of the class notices or the KSDS campaign notices, whichever is later.

Which Hyundai and Kia vehicles are covered by the settlement? Am I included?

The settlement covers owners and lessees of the “class vehicles” – which are described below – who bought or leased their car in the United States. This includes vehicles purchased or leased while the owner was abroad on active U.S. military duty but excludes Hyundai and Kia vehicles bought in U.S. territories and/or abroad.

If you’re covered by the settlement, you should have already received notice, either by email or traditional mail. The following vehicle models, 3,956,568 cars in total, were listed as covered by the settlement in the judge’s final approval order:

Affected vehicles are those that were originally equipped with or replaced with a genuine Theta II 2.0-liter or 2.4-liter gasoline direct injection engine within original equipment manufacturer specifications. The 2019 model-year vehicles covered by the deal are those manufactured before the knock sensor detection system technology was incorporated into their production.

Excluded from participation in the settlement are claims involving death, personal injury, property damage and subrogation, as well as affiliates of Hyundai and Kia.

I filed a claim. When will I get my money?

Compensation from a class action settlement usually begins to go out after final approval has been granted. If you filed a claim, or intend to file a claim, you should see your piece of the settlement in the coming weeks or months. Sit tight.

Have you received notice about the Hyundai/Kia engine fire settlement? Have you received your piece of compensation from the settlement? Let us know down in the comments.