Gap insurance is a pretty new idea isnt it?
For me, it seems to make sense. I bought the car for £5k, down from £6k. The car was bought outright, Gap cover for me is 3 years (think thats standard, could be wrong!)
It's really all covered in the t&c's of the insurance. I supposed it was originally designed for people who have finance on vehicles, but infact benefits those without.
One warning, there was someone on here a few months back who said the Gap refused to pay because she didnt have a settlement figure from the day the car was written off. Word of warning, if you have Gap insurance, get the settlement figure from your finance company on the day of the accident, saves them trying to sting you later I guess