Insurance folks - what happens when an entire condo building is destroyed?

This is for my personal edification only, no “need answer quick!” here.

I recently renewed my condo insurance for the condo we rent out in Georgia and was curious about what happens in practice if heaven forbid the entire building was destroyed.

I’m guessing our single family home insurance would be much simpler: we would come to an agreement on how much we would be reimbursed and would rebuild. I assume the details would be up to us: we could go big and dump our own capital into a bigger place, or go small and pocket some of the cash, or pocket the cash and sell the land (minus whatever was still due on the mortgage). Or maybe I’m mistaken and our options once accepting insurance money would be more limited.

But what happens if an entire condo building is destroyed? We have insurance for the internal space and the HOA has insurance for the building. But its hard to imagine them rebuilding the 1920s structure as-is, with everyone getting exactly the same space that they had before. Is that actually what typically happens? Or do owners just get cut a check from both the building and internal policies, if they decide that rebuilding the same condo building doesn’t make sense? And who gets to make those decisions? It sounds like a horrible nightmare with a million moving parts. I’m wondering how these sort of things shake out in practice.

The condo declaration typically provides for distribution of insurance payout to build a new structure having the same horizontal and vertical property lines.

The dec also typically provides that the entire property can be sold by vote of 75% of ownership, and that’s the more likely result in case of total destruction. The insurance payout would be distributed on basis of ownership, and folks would move into other buildings while something new was developed on their former property.

Unless its an historic building or something, the owners of the land will want to rebuild with something ‘better’. I am sure that in most (all) cases, the individual owners will settle for a cash distribution. It may well be spelled out in detail somewhere in the lease or in the insurance documents.