If my house gets destroyed by a hurricane and I have a mortgage, would the bank want to close out the loan immediately after the insurance company pays out?

Most of the discussions about "mortgage + insurance + disaster" seem to be about ability or inability to keep making monthly mortgage payments if the house gets destroyed.

I have a different question.

If I can continue making monthly payments after the house gets completely destroyed. What happens once the insurance company pays out?

Would the bank want to get their remaining balance from that insurance money right away and close out the loan? Or would I be able to keep the entire insurance payout and use that money to build a new house while still making monthly payments to the bank?

I'm trying to figure out if I would be able to build a new house using insurance money and continue making my mortgage payments or if I would in effect be left with my land and the equity I had in the house and would have to look for a loan to build or buy a new house.

submitted by /u/Aero72
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