The insurance underwriter realises Jill was swapped out when he sees it sitting in a used car dealer's lot, still plated. I'll admit I'm not too familiar with California law, but in most jurisdictions, the plates are removed when the vehicle ownership is transferred (unless, in some jurisdictions, it's transferred to immediate family). Is this not the case in California?
California is one of those states where the plates are issued to the car and stay with it as long as the vehicle is roadworthy. So, unless the car is reported as totaled and the plates are returned to the state (which is what the underwriter is supposed to do), those plates are still legal.