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Yes, it happens all the time. The homeowner can cancel the policy at any time or the company might cancel for various reasons outlined in the policy (insurance contract) you signed.
Either party, the insured, or the company, could cancel the policy, However if it is a choice of the homeowner, it would be best to maintain the policy as is untill the claim is resolved. You want to remember that once you cancel your policy. You will no longer have an agent in that company to advocate on your behalf.
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