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The California Department of Insurance has made a grant to the Los Angeles District Attorney’s office of $6,963,600.00, for the investigation and prosecution of auto insurance fraud in Los Angeles County. The California Insurance Commissioner, Dave Jones, together with L.A. District Attorney, Jackie Lacey, made the announcement of this grant last Monday.

Los Angeles as a city together with its county has become the automobile insurance fraud capital of California. Jackie Lacey said as quoted in the California Department of Insurance’s Press Release from Monday, “Los Angeles County has the dubious distinction of being the state’s epicenter for auto insurance fraud. The impact of that fraud on working families in Los Angeles County is real and substantial.”

Why is Los Angeles the auto fraud capital of California? The question spontaneously follows the fact that Los Angeles now makes up nearly 43 percent of all auto related insurance fraud.

Nancy Kincaid, from the California Department of Insurance, discussed earlier this week with this writer the fact that in Southern California drivers follow each other much more closely than in less intensely populated regions. There used to be so much more distance between cars in Sacramento, for example, and the greater Sacramento areas some decades ago because there was less population. Drivers gave their cars much more distance between each other, Nancy explained.

But now with heavier populations even in Sacramento, staged accidents are easier to make happen. “Drivers follow very closely,” Nancy Kincaid went on, “we need to drive defensively.”

Now a scheme extensively used in staged collisions mostly permeating Los Angeles is the swoop-and-squat scheme. Where traffic is tight with cars following closely, a car driven by a member of an organized ring will suddenly swoop in front of its partner in crime, the squat car, and cause the partner to slam on the brakes. Thus, a car behind the squat, some innocent victim, is forced to rear end the squat car.

We all know—those of us who have been driving a substantial number of years—that the car that rear-ends another is at fault. And in this case of the staged accident, the rear car is completely set-up. Nancy Kincaid said, “They literally put you in a position where you have nowhere to go.”

A Thousand Oaks based auto insurance agent, Jim McAnany, told this writer in early September that an automobile policy insurance premium for a vehicle garaged in Los Angeles is substantially higher than, for example, that same vehicle garaged in Simi Valley or Thousand Oaks.

A demonstration was performed by California Department of Insurance investigators last Monday for the Media at the Los Angeles Police Department’s Edward M. David Emergency Vehicle Operations Center in Granada Hills, California. These pretty good videos demonstrate how the lead car suddenly pulls in front of the partner-in-crime car, causing the partner-in-crime to slam on the brakes and force the innocent and oblivious third car in the back to rear end the partner-in-crime or the “squat car”.

Because of the lead car that “swoops” in front and the second car that slams on the brakes and “squats”, this scam and technique is called the “swoop and squat” scheme. These criminals are targeting 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.

The California Department of Insurance encourages anyone suspicious that they have been set-up in a staged collision to call them at 1 800 927-4357 or to go to their web site at www.insurance.ca.gov.

The CA DOI also offers these clues and red flags: