AI Avoidance of Car Insurance Scams for Self-Driving Cars


By Dr. Lance B. Eliot, the AI Insider for AI Trends

I drive a somewhat exotic luxury car. Driving around, I am at times especially aware of the fact that it is a pricey car and either get accolades from other drivers and pedestrians, or at times receive ire from those that think it is wrong to drive such a car (ecologically because it is a gas guzzler, or because it seems boastful and a brag). Some places that I drive are equally filled with such exotic cars, and sometimes even more elaborate ones. In other cases, I drive in areas where the car stands out because the other cars in the area tend to be less expensive. In those areas, it instantly draws attention.

Some drivers of such exotic cars relish the attention, wherever and whenever they drive. For me, I am not that keen on the attention, especially in places that seem suspect. When I park the car on the streets in downtown Los Angeles, I never know whether when I come back if the car will be still there (might be stolen), or might be marred (graffiti or worse).  One of my previous cars had actually got stolen (I am a statistic now).

Driving this kind of a car has other potential consequences too.  

The other day, I was on the freeway and driving along without incident. Suddenly, a rather ragged car came up from behind me, switched into the lane to my left, zipped ahead, and then opted to unexpectedly jump into my lane directly in front of me.  There didn’t seem to be any obvious reason for this driving behavior. If the driver was trying to get ahead in traffic, the act of getting into my lane at that moment actually slowed down the progress of the other driver. Given the seemingly frantic movements, the driver should have stayed in the lane it had gotten into, or upon getting into my lane the driver should have accelerated further forward since there was empty space ahead.

As Spiderman might say, my spidey sense was tingling. Things weren’t adding up.

I next saw another ragged car coming up behind me, and it suddenly switched into the lane to my left. As it drove past me, I gave the driver a hard look. The driver seemed to be acting like they didn’t see me, but I am sure they must have. The driver was focused straight ahead. I noticed though that the driver ahead of me seemed to be studying his rearview mirror. For whatever reason, he suddenly seemed quite interested in what was happening behind him.

If I had not been paying attention, I would have just continued forward and not given much thought to what was occurring around me. Nothing explicit had yet happened. A car was ahead of me, and a car was to my left. They were both driving quickly, faster than the surrounding cars. They were both cars of a bit ragged in nature. They were presumably completely independent of each other. But, I just felt that maybe they were somehow connected to each other.

I opted to switch over to the rightmost lane. There was no real need to do so, but it seemed like it might be handy to change lanes and see what else would happen with the other two cars. The car that had been ahead of me tried to follow me over to the rightmost lane. He was blocked though by other cars. The cars in my lane then passed him. Meanwhile, the other car that had been to my left opted to slow down and keep pace with the other car. Why didn’t that driver zoom forward, which seemed like what he was earlier trying to accomplish?

The whole situation smelled. I knew that an upcoming freeway exit could be used to get off the freeway and just a block afterward would be an entrance that I could use to get back onto the freeway. At the last possible moment, I veered into the exit and got off the freeway. When I then drove ahead and got back onto the freeway, the other two cars were no longer to be seen (assuming they continued at the speed of the freeway, they would have been a distance ahead by then).

I might have just avoided a swoop and squat.

Are you familiar with a swoop and squat? If not, welcome to the vocabulary known to those that deal with car insurance fraud. The swoop and squat is the name given to a series of maneuvers by criminals trying to force a car accident.

Here’s how it works. Two vehicles (or more) work together to execute the swoop and squat. A driver in a lead car (the squatter) will get ahead of a target car. The target car is usually an expensive vehicle, which has been identified while driving along as a good candidate to be involved in an insurance fraud. The second criminal car moves ahead of the now lead criminal car and the target car. The front most criminal car then swoops into the front of the squatter. The squatter jams on their brakes. The target car driver then also presumably tries to quickly brake, but with the short distance between them and the squatter, they are going to rear-end the squatter car.

The swoop car then darts away and does not stop for the accident that it has now apparently caused. Meanwhile, the squatter car and the target car usually agree to stop and exchange insurance information. The squatter car might even have more than just the driver in it, perhaps several occupants. This allows the squatter car to potentially make multiple insurance claims, including that the occupants of the squatter car claim various injuries.

The beauty of this “accident” will be that the target car driver is usually held responsible for hitting the squatter car. You can of course try to profess that there was another car that cut-off the squatter car and that the squatter car messed-up. But, you would be held accountable for not allowing sufficient driving distance between you and the car ahead of you. It’s a mess. The scammers have staged the whole thing, and any savvy insurance adjuster is going to recognize it. Unfortunately, the odds are that the scammers will probably get away with the scam.

You might be thinking that this kind of scamming rarely occurs. You’d be wrong! I am either proud or disappointed to let you know that Los Angeles is considered the capital of auto insurance fraud. The California Department of Insurance (CDI) has about one hundred detectives devoted to auto insurance fraud. They are widely overworked and undermanned for the volume of auto insurance fraud occurring. Some of the auto insurance fraud is well organized and accomplished by gangs or other criminal enterprises.

The payoff can be high for those that commit auto insurance fraud. Insurance companies have deep pockets. They need to weigh the payout versus the effort to prove some kind of auto insurance fraud. Los Angeles is attractive to scammers because it has a goodly percentage of high-value vehicles, it has a tremendous amount of daily traffic, and lots of non-scam accidents that happen all the time. Thus, the scam car accidents are easier to pull off and can more readily hide among the many other non-scam car accidents that occur.  If you were a criminal and tried to pull the scam in some other locale, it might be more suspicious and standout to police and the insurance companies.

The scammers will try to make as much money of a scam as they can. They will often take their damaged squatter car to an auto-body shop that is also involved in the scam. The car body shop will make the damage appear to be more extensive than it really was. Either they will file false indications about the damage, or in some instances they will even do more damage to the car to make sure that it really does appear to have the extensive damage claimed. The occupants of the squatter car will potentially claim personal injuries due to the accident. They might have a physician that’s also involved in the fraud ring. The physician will substantiate the false injuries and then get a part of the loot for the scam.

If convicted, the scammers could face some serious prison time since this kind of fraud is considered a felony. They could also be financially penalized too. In one sense, this though is a type of fraud that is one of the least likely to be spotted. It is a low likelihood that it will be investigated. It is a low likelihood that it will be prosecuted. Sadly, the amount of money to be made by the scam, versus the chances of getting caught and getting penalized, means that auto insurance fraud continues to be a budding business.

Was I faced with a potential swoop and squat when I was on the freeway? I don’t know for sure. It certainly had the right ingredients. I was driving a high-value car. I was on a crowded freeway. The potential squat car had purposely maneuvered in front of me, when there didn’t seem to be any reasonable reason to do so. It was a ragged car. The second car, the potential swoop car, appeared to be working in conjunction with the other car. It was a ragged car. They were both positioning themselves into a classic swoop and squat situation. It might have been only in my mind, but I figured it was worth taking a mild evasive action to avoid the chances of getting mired in an auto insurance fraud case.

What does this have to do with self-driving cars?

At the Cybernetic Self-Driving Car Institute, we are developing AI for self-driving cars that detects these kinds of potential auto insurance fraud scam maneuvers and then seeks to avoid getting mired in them.

When I give presentations about our work at autonomous vehicle conferences, one of the first objections that I get is that there will not be a need for detecting auto insurance fraud cases, which purportedly is because once we have all self-driving cars on the roads there will no longer be any such scams. In other words, if we have all self-driving cars on the road, these self-driving cars would not act in such a nefarious manner. In this nirvana world, all self-driving cars are respectful of each other and we won’t have scam accidents.

Wake-up! We are going to have a mixture of human driven cars and self-driving cars for many, many, many years to come. This idea that by some magic act that suddenly all of the human driven cars disappear and are entirely replaced by self-driving cars is not realistic. It is a crazy dream. Therefore, self-driving cars must be prepared to interact with and deal with human driven cars. Period.

I would also like to add an aside. These same dreamers think that self-driving cars will always be respectful of the laws of driving and that they will always be respectful to other self-driving cars. Why will this be the case? It assumes again some kind of idealized world. We can pretty much anticipate that self-driving cars are going to be varying from this all-respect approach. We might even see scammers that hack a self-driving car to participate in scams. There are likely even going to be new kinds of scams involving self-driving cars that we aren’t even thinking about as yet (some self-driving cars will be targets, some will be perpetrators).

Another question that I sometimes get involves the aspect of whether self-driving cars will have car insurance. Normally, the driver of the car is the one that has the auto insurance. But, if the driver is AI, who then has the car insurance? Will the AI have the car insurance?

We pretty much can reject the notion that AI will be considered the equivalent of a human and be getting car insurance. The auto maker that made the self-driving car might be the one that has the auto insurance for the car, or someone else such as the tech firm that made the AI, or others. I think we can all agree that one way or another, self-driving cars are going to have car insurance.  I don’t think we’re going to have uninsured self-driving cars driving around on our public roadways (well, at least not legally doing so).

When self-driving cars first get mired in auto insurance scams, it will be a highly visible issue. The scammers will probably try to claim that the AI was mistaken and that it caused the accident. This though is something that today’s scammers are generally not sophisticated enough to try and pull off. Plus, it would make them overly visible. Nonetheless, I am sure that self-driving cars will be an attractive target. These first self-driving cars will be high-value cars and probably have high-value occupants.

In fact, you could suggest that self-driving cars are going to be ripe and easy targets. Most self-driving cars today are being developed without the kinds of defensive driving tactics that human drivers know and use. Self-driving cars tend to act like a novice driver. They are easy to fool. You might be aware of the famous case of the self-driving car that came to a four-way stop. The other human driven cars were able to roll through the stop signs and the self-driving car kept waiting its turn. In a similar manner, I am sure that scammers will be aware of the limitations of the self-driving cars in the marketplace and be able to exploit those limitations to undertake an auto insurance scam.

Another form of today’s auto insurance frauds involves bicycle riders that intentionally ram into a car. These bike riders are willing to get hit by a car, in order to file an insurance claim. Usually, though, these scams are dealt with immediately in that the bike rider asks the human driver for cash to make the case go away. Asking for say $200 cash is an easy scam and the driver will often want to avoid the insurance paperwork, so they give the cash to the scammer and continue along on their driving journey.

Anyway, let’s get back to the AI of self-driving cars and how it needs to be prepared to cope with potential auto insurance scams.

We are developing and testing AI that recognizes the swoop and squat. Similar to how I noticed the actions of other cars around me, there is a module in the AI of a self-driving car that is watching for signs of a potential scam. In the case of the swoop and squat, it sits aside of the rest of the AI driving the car, and tries to see if there is something suspicious about the other cars around the self-driving car. If it spots something potentially amiss, it notifies the strategic and tactical AI components that are driving the car. If the suspicion has a high enough probability, and if an avoidance effort can be done without undue risk, the self-driving car will take appropriate evasive action.

The self-driving car can also let the occupants know about what has taken place. The human occupants in the self-driving car might wonder why the self-driving car has suddenly exited from the freeway and then decided to enter back onto the freeway. There is an explanation system that can communicate to the occupants what has occurred. In some case, the occupants might not want to know and not care, while in other instances the occupants might be keenly interested to know.

Besides the swoop and squat, we also have the AI system be on the watch for other kinds of auto insurance scams.

There is the panic stop scam, consisting of just one squatter and no swoop car.

There is the start and stop, again usually done with one criminal driven car ahead of you.

There’s the wave-in, in which the human driver seems to offer you an opening in their lane and then rams into your car. This is harder for a conventional self-driving car to get caught up in, due to the aspect that the human driver of the criminal car usually makes a hand signal to the human driver of the target car. But, it still can be done with a self-driving car by making a tempting opening for the self-driving car and then ramming into it when it takes the opening.

Another scam is the sideswipe. This involves intersections that have two left turns. The criminal car will swerve into the lane of the target car.

It is hard to know in-advance that a scam is going to occur. The actions of the scammers can be similarly done innocently by regular drivers that are careless. Thus, there is no clear-cut way to know that a scam is being setup. That being said, whether a scam or not, the risk factor of getting involved in an accident is certainly detectable in all of these maneuvers. A good self-driving car should have a robust defensive driving AI capability to be watchful of these potential situations. These particular maneuvers such as the swoop and squat should even more so be on the defensive watch, since they are being done by both regular drivers and the scamming drivers.

It will be interesting to see how scammers find ways to especially make use of self-driving cars in their nefarious efforts. Besides the type of driving scams that I’ve mentioned, there are other scams such as staged auto thefts, there are dumped vehicle frauds (scammers dump a car into a lake and claim it was stolen), there are born again vehicles (a stolen vehicle is given a new Vehicle Identification Number or VIN, and used in a scam), and so on.

I know that many are hoping that self-driving cars are going to improve the world as we know it. There are indeed many ways in which self-driving cars are going to aid us. At the same time, without seeming to be pessimistic, I am sure that we will see criminal minds trying to find ways to involve self-driving cars into criminal acts. Let’s try to make the AI for self-driving cars good enough that self-driving cars won’t be ready unknowing dupes or accomplices in the rotten work of criminals.

This content is originally posted on AI Trends.