Insurance Law

Staged Auto Collision Schemes By Scam Artists Target Innocent Drivers – Endanger Other Drivers and Cost Public

Drivers should be alert for staged auto collisions that target innocent drivers. Last year 59.5 percent of all insurance fraud referrals received by the California Department of Insurance were for suspected automobile insurance fraud. In Los Angeles County alone, the Department of Insurance received over 7,700 suspected auto fraud claims. Los Angeles makes up nearly 43 percent of all auto related insurance fraud in California.

The most common scheme typically used in a staged collision is the swoop-and-squat. This scheme involves two vehicles working together to box in a target vehicle and forcing a collision.

These staged crashes are most often perpetrated by organized crime. Stagers target high value vehicles such as commercial vehicles, expensive luxury vehicles, and vehicles owned by cities or counties. These vehicles are targeted because there is a virtual guarantee of insurance coverage.

"When I took office as Insurance Commissioner in 2011, I pledged to use all the resources available to my department to stop insurance fraud and bring these criminals to justice," said California Commissioner Dave Jones. "We have been successful in reducing fraud and increasing the number of criminals brought to justice. To date, my department has conducted hundreds of auto fraud investigations and arrested more than 1500 people statewide for various types of auto fraud."

The department helped prevent nearly $143 million in automotive fraud claims, which could have been lost by insurance companies last year. While the potential fraud was avoided through collaborative work of the California Department of Insurance and local partners, actual loses still increase the cost of business to insurance companies and these losses are passed along to policy holders through increased rates.

"Los Angeles County has the dubious distinction of being the state's epicenter for auto insurance fraud," Los Angeles District Attorney Jackie Lacey said. "The impact of that fraud on working families in Los Angeles County is real and substantial. My office along with the California Department of Insurance is committed to investigating and prosecuting the criminals who participate in these staged collisions. These wrecks are costly not only in terms of financial loss but also may have the unintended consequence of injuring or killing innocent motorists on our streets and highways."

If you suspect you or someone you know are the victim of a staged collision, insist on a police report, document as much information about the collision as possible, use a cell phone to document the post-collision damage with photographs or video, and ask the peace officer to positively identify everyone involved.

After a collision look for these following red-flags of fraudulent activity:

The other car is packed with passengers.

The other driver has a relatively new insurance policy.

The other car is in poor condition or has a "salvage" title.

Traffic was flowing smoothly and the other driver stopped suddenly.

The other driver and/or the passengers make extra effort to avoid conversation about the other vehicles in the area.

There is a witness that substantiates everything the other driver says.

The other driver and his passengers all claim injury despite relatively minor collision damage to the vehicles.

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