The question is about a house with a mortgage that burns down. There is full fire insurance coverage, so the insurance covers the mortgage and more. Issue is that you’re planning on rebuilding the house, at which point you’ll need another mortgage, and since the time of the current mortgage rates have increased significantly.
So it would be very much in your interest to keep making the payments on the current mortgage while you rebuild the house, at which point the mortgage would attach itself to the new structure. OTOH, the mortgage company is not going to be keen on losing their collateral, which is now severely devalued.
But possibly you could put the amount of the principal into some sort of escrow, so that the mortgage company has their collateral, and you would gradually withdraw the funds to pay for the rebuilding as the value of the land grows with that rebuilding.
[It also occured to me that the mere decrease in value of a property is not enough to trigger the termination of the loan, which is why so many owners are currently underwater, but I would have to imagine that there are clauses in the mortgage contract for events like fires.]