If you’re still driving an older vehicle, you might want to skip this one – but if you have a new vehicle and still owe a substantial amount on it, listen up. If you are into the car “upside down,” there’s something you need to think about when you compare car insurance policy terms.

What Is “Upside Down”? It’s another game that the economic powers-that-be play with working people to keep them down and themselves on top; another one of those “rigged” rules of the financial games that is designed to see that at some point, people owe more on major purchases than they can be sold or replaced for.

Here’s the scenario: you have agreed to purchase a new vehicle for $30,000 with a 1.5% loan; with tax and registration fees, the total price comes to $32,500. You put $1000 down and have been paying $542 a month on the 60-month loan for the past year – bringing your total outstanding balance to $24,996.

Then, on the first anniversary of your new car purchase, you have it parked on the street outside a local restaurant. While you and your date are enjoying a sumptuous meal, some selfish, self-centered sociopath driving a Hummer 2 with too much gin mixed with their gasoline slams into your 1-year-old vehicle while attempting to outrun the police – and completely destroys it.

No problem, you think – you had full coverage auto insurance, so the loss should be fully covered – right?

Except that when you file a claim with your insurer, you are informed that the vehicle was worth only $21,000 at the time it was destroyed. Meanwhile, you still owe nearly $25,000 – meaning you’re stuck with almost $4,000. And the loss wasn’t even your fault!

What to Do This is a travesty of justice, but unfortunately, it is perfectly legal under our economic system. Unfortunately, this is not going to be reformed anytime soon, if ever – and will probably continue to get worse as time goes on and economic power continues to concentrate into fewer and fewer hands. There are, however, steps you can take to protect yourself.

First, when you get a car insurance estimate, be sure and ask your agent if you are fully indemnified – in other words, whether it covers the full purchase and replacement cost of the vehicle. You’ll need to examine the declaration sheet carefully, particularly the fine print. If you are unable to get car insurance that offers full indemnity in this case, you can usually purchase a “rider,” known as “gap insurance,” that will cover the difference between the determined value of the vehicle and what you might owe on it in the event of a total loss.

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