Hi Paul,
Yep that's the trouble with "paying insurance" when you have it and you are paying out for the premiums sod all usually happens to recover some of those expensive payments - but the minute you cancel it, the house burns down and then the premium payments fade into insignifigance when you have to pay the full cost of rebuilding.
Your house insurance premium seems a little high though, I have obtained cover last year for around £150 for upto £500.000 for structure and contents with all the bells and whistles through Frizzells, a company that I have had my car insurance with now for around 25 years.
Brian