If you just purchase a years worth of insurance on your new home, and it burns down within the first month, in addition to paying out the claim, are you also owed a refund for the remaining 11 months that you’ll no longer be using?

Interesting question! As long as there is a mortgage on that house, you need to carry insurance regardless if there is house there or not. Now, if you don’t have a mortgage and cancel the policy after the claim has started technically they should still pay the claim because you had coverage at the time of the loss and get a refund for any unused premium… I don’t think I’d recommend that though.

I wouldn’t recommend cancelling just because the house burned down. You will be without personal property coverage, without liability coverage, will show a lapse in coverage when you try to get a new policy later, will probably cause yourself grief in their computer system throughout the claims process, and could be in violation of the terms of your mortgage causing them to implement force-placed insurance on your home which will be wildly more expensive even though the structure has burned down. I know that I, personally, would not want to remove liability coverage at the same time a bunch of people are digging handling wreckage on my property. And what happens if someone steals the building materials off your lot? Or if a storm downs a tree on the partially completed structure? You’re not covered. You have a duty to protect that for the mortgage holder.

I mean the policy will still be active during the rebuild. Assuming you choose not to, your policy will pay ACV to cover your mortgage then you’d cancel.

But generally speaking you are always due money back for unearned premium at time of cancellation your policy generally won’t be cancelled during the rebuild.