The “Swoop and Squat” Auto Insurance Fraud

Insurance payouts are very attractive – some people think that it’s money just sitting there waiting for you to claim it! However, you can only get it if you’re involved in an accident. Perhaps this guy rear-ended you, or perhaps that guy accidentally grazed the side of your car. Either way, you will have to be involved in an accident to get the payout.Swoop and Squat

But wait… what if you can set up an accident? Perhaps make a deliberate crash look like an accident? If you can get someone else to rear-end you, they’ll most likely to be at fault, right? Then their insurance company will have to pay you for the damages incurred!

If you have thought about this, you’ve just hatched a commonly known insurance fraud: the swoop and squat.

What is the swoop and squat auto insurance fraud?

The swoop and squat auto insurance fraud is a deliberate attempt by a driver to claim auto insurance payouts by setting up an accident on the roads. These accidents usually involve an unsuspecting victim rear-ending the criminal, with at least an accomplice helping him.

How is the swoop and squat auto insurance fraud carried out?

In a swoop and squat auto insurance fraud, at least two people are involved. These two conspirators will scout the streets with their vehicles for their preferred target.

These two criminals will be driving old cars. Sometimes, in order to get the best payout, the car to be rear-ended will be carrying 4 other passengers. Then, the two vehicles will select their prey – usually a lone driver without passengers, driving a new model of a car. This ensures that there will be no witnesses when the fraud is carried out, and also ensures that the car is covered substantially by auto insurance.

Once the victim is targeted, the first car will “swoop” in front of its prey. His accomplice will then drive to the side of the victim, preventing him or her from swerving the vehicle out of harm’s way. Then, the car in front of the victim “squats” – jamming the brakes so that the unfortunate victim rear-ends the scam artist’s car.

Usually, the damage is minimal, as this scam is usually conducted on normal roads. No injuries are expected from each party, and the vehicles usually are still in workable condition. As such, the fraud artist will persuade the victim that they’ll settle this accident out of court – this will prevent the victim’s insurance premium from escalating due to this claim. The victims are usually quick to agree – no one wants to pay higher premiums for such minor damages.

Then, a few days later, the victim will receive a shocking piece of news – the scam artists are now filing for insurance claims for the accident, and they are claiming back and neck injuries from the accident. If the scammer has passengers on board, all of them will claim that they have suffered injuries from the accidents. Without any witnesses, the victim usually has no choice but to accept that they are involved in the accident, and accept the blame.

This will usually leave the victim with a higher insurance premium because of the at-fault accident, or even cause the insurer to drop him. The criminals, however, will get the payout from the victim’s insurance company. And with that, another successful swoop and squat auto insurance fraud is conducted.

Check out this video from the National Insurance Crime Bureau to see how the swoop and squat is carried out:

What can I do to prevent this?

The one thing you should do to prevent becoming a victim of a swoop and squat auto insurance fraud is to be alert when driving. Look out for vehicles that are starting to slow down in front of you. Also, always maintain a safe following distance – if you maintain a safe following distance, you will never rear-end the other vehicle.

If you are already in the accident, always insist that your insurer will decide who’s at fault, and call the police to allow them to handle the matter. If not, you should sign a written agreement with the other party that you’ve agreed to settle this issue out of court. By signing the agreement, the other party agrees that no injuries have been sustained, and thus they will not be able to claim Bodily Injury Liability from you.

With the recession, more and more people are turning to the swoop and squat auto insurance fraud to make some quick cash. Indeed, even crime rings have been known to do this on a regular basis to gain some income for the group. Be on the lookout for these scam artists, and take the necessary precautions to prevent this from happening.


  Comments: 2

  1. You left out one important detail? What’s a person’s recourse if this happened to them? Can they get the accident ruled the fault of the scammers?

    If not, then that’s why this scam exists. There’s no liability for even attempting it. Worst case scenario for the scammers, they’re no worse off than they were before the scam.

    That ridiculous “rear enders are always at fault” law should be repealed immediately, by jury nullification or armed revolution if necessary.

    • Andrew@4AutoInsuranceQuote

      You are correct in that there isn’t a whole lot somebody can do if they are the victim of this. But this is true of most crimes carried out by people who know what they are doing. If you suspect it is happening while still at the scene of the accident, you can potentially just walk away without giving any information. This could be dangerous, and you would need to verify other people’s identities and insurance policies before doing this. If they aren’t willing to give you their information and are being pushy, then you could call the police to come to the accident scene. If it’s legitimate, then the police will simply verify the other person and write an accident report. If it’s not legitimate, the other people will leave the scene.

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