Gap insurance is used to 'gap' the amount you owe on the car vs what it is worth if (heaven forbid) it is burned, flooded, stolen or crashed beyond repair. Once the amount you owe is less than the value of the car you need to drop Gap ASAP.
If your car (blue book value) is not worth as much as you owe on the vehicle i'd consider keeping it, but if you bought it right and owe less than what the cars worth, then you're just wasting money.
Covers the difference between the ACV (Actual Cash Value) of the car and the loan balance ..... IF the car is totalled out.
There ARE certain provisions where it WON'T pay such as late payments, repo fees and the like..but it IS a good thing in today's market especailly with the initial payments being low and financed out over a longer period of time...
Good luck and I hope this helps!
June 2006 my aunt was in town visiting and borrowed our car with permission for a 15 minute drive. She totalled our car and damaged another for $9000 in damages. Fast forward to Dec. 28, 2007...my 16...