Insurance companies spend an obscene amount of money to defend against illegitimate accident claims and over exaggerated loss amounts. Victims are caught unawares when scammers who collaborate with a network of certain individuals, stage accidents in an attempt to get compensation from insurance companies. Lawyers and doctors at times urge their clients to use services, which are otherwise useless with the intention of claiming larger compensations. Insurers and insurance companies need to take precautions to facilitate reduction of insurance fraud.
Insured individuals should be more cautious by, abiding to road laws. In case of an accident, one should make keen observations about their surroundings sighting
every detail and take photographs if possible. Insurance companies should also take measures, setting up data banks, which will provide information on stolen cars or fraudulent individuals who have made claims in other insurance companies and rewriting contracts that protect the insurer against insurance fraud.