Insurance fraud through staged car accidents is a rising problem in California, with the state receiving over 20,000 fraud reports annually.

Capt. Eric Hood of the California Department of Insurance describes Southern California as “the fraud capital of California.” He explains various schemes criminals use, such as the “sudden stop,” “swoop and squat,” and “drive down” techniques.

The primary goal of these staged crashes is typically to exploit insurance policies for medical benefits, as fraudulent injury claims can lead to large settlements profitable for the criminals and sometimes complicit clinics or attorneys.

“You can’t have people crashing on the roadway or the freeway, and three or four-ton vehicles… potentially someone will die,” Hood warns.

One notorious case on the 710 Freeway in 1997 resulted in three fatalities, leading to the formation of the CDI through Assembly Bill 1050 in 1999.

Hood emphasizes that these fraudulent crashes occur daily, with perpetrators often recruiting random individuals to increase potential payouts. The fraud extends beyond the crash itself, involving false medical claims and exaggerated treatments.

How to Protect Yourself

To protect yourself, Hood recommends using front and rear-facing dashcams. If involved in a collision, he advises calling the police, especially if something seems suspicious.

“If you’re in a traffic collision, call the police, especially on the highway. The CHP will take a report. If you suspect something is out of place, let the officer know,” Hood explains.

Despite efforts to combat this issue, the department faces resource constraints, with a 30% vacancy in sworn positions. This limitation hampers their ability to investigate all reported cases thoroughly.

As insurance fraud continues to evolve, staying vigilant and informed remains crucial for drivers to protect themselves from becoming victims of these staged accidents.

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