The Theta II class action settlement is actually two related agreements that resolved claims Hyundai and Kia sold millions of vehicles with engines prone to bearing failure, seizure, and fire. The first, Engine Litigation I, was finally approved in May 2021 and delivered a lifetime powertrain warranty plus reimbursements worth up to $1.3 billion for owners of vehicles with 2.0-liter and 2.4-liter Theta II GDI engines. The second, Engine Litigation II, was finally approved in April 2024 and extended similar relief — a 15-year/150,000-mile warranty and cash benefits — to roughly 2.1 million additional vehicles with other engine families. Both claim windows have closed, but the warranty coverage remains active for eligible owners who installed the required software update.
What Went Wrong With the Engines
The defect traces back to Hyundai’s Alabama manufacturing plant, where crankshafts in the 2.0-liter and 2.4-liter Theta II engines were not properly cleaned after machining. Metallic debris was left inside the engine block, scouring internal parts and clogging oil passages over time. Starved of lubrication, the connecting rod bearings wore out prematurely.1Yahoo Autos. The Biggest Problem With Kia and Hyundai’s Theta Engine
Drivers typically noticed a metallic knocking noise or an oil pressure warning light. If the vehicle kept running, a damaged connecting rod could punch through the engine block, spilling oil onto hot surfaces and starting a fire.2Hagens Berman. Hyundai Kia Engine Fire Hazard Theta II GDI By October 2018, more than 220 non-collision fire reports had been filed with NHTSA and the Center for Auto Safety, and the defect ultimately affected an estimated 4.1 million vehicles across both brands.
Vehicles Covered by Engine Litigation I
Engine Litigation I applied only to Hyundai and Kia vehicles with 2.0-liter or 2.4-liter Theta II GDI engines.2Hagens Berman. Hyundai Kia Engine Fire Hazard Theta II GDI
- Hyundai: 2011–2019 Sonata, 2013–2019 Santa Fe Sport, and 2014–2015 and 2018–2019 Tucson.2Hagens Berman. Hyundai Kia Engine Fire Hazard Theta II GDI
- Kia: 2011–2019 Optima, 2012–2019 Sorento, and 2011–2019 Sportage.3Center for Auto Safety. Kia Hyundai 2.0 and 2.4L GDI Settlements
Vehicles Covered by Engine Litigation II
Engine Litigation II reached three engine families that fell outside the first settlement’s scope: the Theta II 2.4-liter multipoint fuel injection (MPI), the 1.6-liter Gamma GDI, and the 2.0-liter Nu GDI. It covered roughly 1.05 million Hyundai vehicles and 1.16 million Kia vehicles.4Hyundai News. Hyundai Engine Settlement Announcement
Covered Hyundai models: 2011–2019 Sonata Hybrid, 2016–2019 Sonata Plug-In Hybrid, 2010–2012 Santa Fe, 2010–2021 Tucson, 2014 Elantra Coupe, 2014–2016 Elantra, 2014–2020 Elantra GT, and 2012–2017 Veloster.5Hyundai E2 Settlement. Hyundai E2 Settlement
Covered Kia models: 2010–2013 Forte and Forte Koup (Theta II MPI), 2014–2018 Forte (Nu GDI), 2012–2019 Soul (Gamma and Nu GDI), 2012–2019 Rio (Gamma GDI), 2011–2013 Sorento, 2011–2013 Sportage, and 2011–2020 Optima Hybrid and Plug-In Hybrid variants.6Hagens Berman. Hyundai Kia Engine II Fire Hazard
Warranty Benefits Still Available
The single most valuable benefit from both settlements is warranty coverage, and it is still in force for eligible vehicles.
Under Engine Litigation I, owners of covered Theta II GDI vehicles have a lifetime powertrain warranty on the short block assembly — the engine block, crankshaft and bearings, connecting rods and bearings, and pistons — with no mileage cap and no restriction on how many times the vehicle has changed hands.7Hyundai Theta Settlement. Hyundai Theta Settlement
Under Engine Litigation II, coverage is an extended powertrain warranty of 15 years or 150,000 miles from the original retail delivery date. It also transfers with the vehicle to later private owners.5Hyundai E2 Settlement. Hyundai E2 Settlement
Neither warranty is automatic. Both require that the vehicle has received the Knock Sensor Detection System software update at a dealership.
The KSDS Software Update Requirement
The Knock Sensor Detection System (KSDS) monitors engine vibrations for the irregular patterns associated with failing rod bearings. When it detects a problem, it forces the engine into a protection mode that limits engine speed to roughly 1,800–2,000 rpm, reduces acceleration, and triggers a blinking malfunction indicator lamp so the driver can pull over before the engine seizes.4Hyundai News. Hyundai Engine Settlement Announcement
For Engine Litigation I vehicles, the lifetime warranty applies only to vehicles that received the KSDS update, and no specific installation deadline was set.7Hyundai Theta Settlement. Hyundai Theta Settlement
For Engine Litigation II vehicles, the rules are tighter. The update had to be installed by November 4, 2023, to qualify for most non-warranty benefits, and it must have been installed before any engine failure to trigger the extended warranty, with limited exceptions for vehicles subject to certain NHTSA recalls.5Hyundai E2 Settlement. Hyundai E2 Settlement Owners who skipped the update and later had an engine failure have reported being denied warranty coverage and facing repair bills of $6,000 or more.8WRAL. Kia Engine Warranty Coverage Report
If you own or are buying a covered vehicle, confirm through a dealership whether the KSDS update has been performed. Without it, the warranty behind the settlement does not apply.
Cash Reimbursements and Claim Deadlines
Both settlements paid cash on top of the warranty. The claim windows are now closed, but the categories are worth knowing because they define what the warranty program itself will still cover for future failures billed under it.
Engine Litigation I offered reimbursement for towing and rental cars (up to $40 per day), repair-delay payments of $50 for delays of 61–90 days at a dealership plus $25 for each additional 30 days, total-loss compensation for vehicles destroyed by an engine-compartment fire tied to rod bearing failure (equal on the Kia side to maximum Black Book value plus a $140 goodwill payment), and a replacement-vehicle rebate of $500 to $2,000 depending on model year for owners who sold their vehicle after an engine failure and bought another Hyundai or Kia. Owners who took a dealer service card instead of cash received 150 percent of the cash amount.9Angeion Group. Hyundai Theta Settlement Claim Form10Kia Engine Settlement. Kia Engine Settlement FAQ The claims deadline was August 9, 2021.
Engine Litigation II was more generous. It reimbursed qualifying past repairs in full (with a $150 goodwill payment when a warranty claim had been denied at a dealership and the owner paid out of pocket elsewhere), covered rental and rideshare costs at up to $80 per day, paid up to $125 for stranded owners within 150 miles of home and up to $300 per day for up to three days for breakdowns farther out, paid $75 for repair delays of 61–180 days escalating to $100 plus $100 for each additional 30 days beyond that, paid maximum Black Book value minus insurance proceeds plus $150 for fires and total losses, and offered replacement-vehicle rebates from $1,000 to $2,500 depending on model year.11Kia Engine Class Settlement. Kia Engine Class Settlement FAQ The primary claims deadline was July 8, 2024. For qualifying repairs, failures, or fires occurring after June 7, 2023, claimants had 90 days from the date the costs were incurred.12Kia Engine Class Settlement. Kia Engine Class Settlement
No reopened claims windows have been announced for either settlement.7Hyundai Theta Settlement. Hyundai Theta Settlement5Hyundai E2 Settlement. Hyundai E2 Settlement
When Claims Were Denied
The most common reason claims were rejected under both settlements was “exceptional neglect,” defined as failing to change the engine oil for at least 365 consecutive days or 15,000 miles.13Hyundai Service. Hyundai Exceptional Neglect Definition Claims were also denied for insufficient documentation, for vehicles with salvage titles, and for repairs that fell outside the settlement’s scope, such as noise from timing chains or accessory bearings rather than connecting rod bearing failure.14BBB National Programs. Arbitration Rules and Information – Denial Appeals
Denied claimants could appeal through binding arbitration administered by BBB National Programs. The arbitrator reviewed written submissions and could schedule a phone hearing, and could only award compensation authorized under the settlement terms.15BBB National Programs. Hyundai Theta Class Action Arbitration The window to request arbitration was 60 days from receiving a final denial, with a decision typically issued within another 60 days.14BBB National Programs. Arbitration Rules and Information – Denial Appeals The same denial-and-appeal framework governs warranty claims made now under the settlement warranties, so keeping oil-change records and dealership service documentation matters if you ever need to invoke coverage.