Yes, the insurer will pay the market value at the point of loss, if the vehicle is on finance, there is no guarantee the amount paid by the insurer will cover the finance. This is why it is always a good idea to get GAP insurance if you buy a car on finance.
The car will have depreciated from when it was initially purchased and you can often end up owing money on a car you do not possess due to the amount of finance you have agreed to.