"That's when people abandon their car, often set it ablaze and then turn in an insurance claim for the car being stolen to generate some short-term cash," said Poizner.
Commissioner Poizner says his new data shows car arsons are up an alarming 31 percent statewide over the last two years.
It's prompting the department's investigative unit to crack down on fraudulent claims.
"We're here to say in a crystal clear fashion, that's wrong, that's illegal, and you'll go to jail if you commit insurance fraud," said Poizner.
Those caught could spend two to five years behind bars, plus it counts as a strike under the state's three-strikes law.
Insurance fraud, in general, is up in California. Almost 2,000 people were arrested in 2007 and 2008. That's more arrests for such crimes than have been made in any other two-year period in the state.
When the number of fraud cases rises, the insurance industry warns it hurts everyone else.
"What they don't realize is it's not free money," said Mark Sektnan of California Insurance Companies.
"They will pay for it, in additional rates, less coverage in certain areas, and other issues too," he added.
Commissioner Poizner estimates each Californian pays $500 more a year in premiums for all categories of insurance combined because of fraud.