Will gap coverage cover a totaled vehicle if the insurance company denies the claim?

No because GAP covers any GAP between what you owe on the car and the cars actual market value if the should your loan balance happen to exceed what your car is actually worth. If you owe $16,000 on a car but you owe 18,000, GAP would kick in and pay the remaining 2,000. You would still end up with zero dollars, but you also don't have to worry about paying off a loan on a car you no longer own.