When fire strikes

A few weeks ago, I was reading an article in the SJ about a recent fire that destroyed a local family's home.  Someone had added a comment saying how glad they were the family was okay and that they had insurance.  I can't imagine experiencing a loss of shelter and belongings without insurance, but after hearing a school family's story when their home burned down, I learned that insurance only goes so far.

• Their house was a total loss.  (The Red Cross was an enormous help in the beginning.)  Does insurance take care of demolishing and carting off the debris left behind?  

• The family lived in an apartment for a year while their house was rebuilt.  Did they have to continue making their mortgage payments while also paying rent? 

• How many families choose not to rebuild, taking the insurance money and putting it towards the purchase of another house?

I hope we never have to experience a fire, but I think it would be good to learn what the choices are and how to navigate through it all.  What kind of resources are out there or do we just have to wait until it happens to find out what to do?