LOS ANGELES (CBSLA.com) ― Drivers in Los Angeles County are being warned Monday about about scam artists who stage phony traffic collisions to collect insurance payouts.
District Attorney Jackie Lacey along with officials from the California Department of Insurance (DOI) announced a $4.7 million grant program to fund the investigation and prosecution of auto insurance fraud rings that cost ratepayers millions each year through increased insurance rates.
KNX 1070′s Pete Demetriou reports a driving demonstration of a staged collision scenario was conducted at the LAPD’s Edward M. Davis Emergency Vehicle Operations Center (EVOC) in Granada Hills, where state insurance investigators simulated several techniques that organized rings use on our streets and highways to stage accidents.
“It’s called a swoop-and-squat,” DOI’s Rick Plein said. “The main objective is to have the victim vehicle run into the back end of the ‘squat’ vehicle that squats in front of you.”
The scheme – which involves two vehicles working together to box in a target car to stage a crash and make it appear to be the fault of the driver of the target vehicle – is one of several different variations demonstrated by state officials, who say the number of fraudulent claims has spiked in the last three years.
An estimated 70 percent of fraudulent claims statewide come from the Los Angeles Basin and target specific types of vehicles, including commercial vehicles, luxury cars, and city- or county-owned vehicles.
Authorities warned these claims will drive up insurance premiums and can even leave people injured or killed.
The demonstration was part of the Organized Automobile Insurance Fraud Activity Interdiction Program, California’s first anti-insurance fraud effort that fully coordinated state and local law enforcement to investigate, arrest and prosecute organized auto insurance fraud.
California was ranked third in staged auto accident claims nationwide by the National Insurance Crime Bureau in 2010 with a total of 1,619 claims, trailing only Florida and New York.