The Honda sedan went over the right shoulder of southbound Interstate 405 in Van Nuys shortly after 6 pm, California Highway Patrol Officer Elizabeth Kravig said.
It ran about 20 feet down an embankment and hit the encampment, a dirt area surrounded by trees and brush. The scene was littered with clothing, water bottles and trash.
"A transient or some kind of pedestrian got wedged underneath the vehicle," Kravig said.
Three people in the car were injured, Kravig said.
Two men were taken to the hospital in serious to critical condition and the driver was hospitalized in fair condition with non-life threatening injuries, according to a Fire Department message.
There was no immediate word on what caused the car to jump the freeway.