Gap Insurance can be used to cover a number of different requirements. The basis of this type of insurance is that your vehicle is likely to lose value over a period of time. If it is involved in an accident or stolen, and subsequently 'written off' by your insurance company, you are likley to only receive the market value at that time.
This could be thousands short of the original price you paid if you want a vehicle equivalent to the one you originally bought. Gap can help provide protection against all these eventualities. This means should the unexpected happen, you are not left with a financial burden and no vehicle as well.