Once the contractor is paid, the lien should be released. If the contractor is not paid, then one of several things can happen. You can provide the contractor with a notice to commence suit. This gives the contractor 30 days to file a lawsuit or else abandon its lien. You can wait and see if the lien expires. The contractor can simply commence suit on its claim against you. Or, and this is what usually happens, no one will do anything until you have to refinance or sell the home. At which time, someone will have to deal with the lien. At this point, you just need to make sure the lien is released when the insurance company pays the contractor.
Mr. Andersen's answers are not intended to create an attorney-client relationship and are based on only the limited information provided in the question. Thus, his answers should not be considered as legal advice, and persons seeking legal advice should contact Mr. Andersen directly and/or another attorney with a law license in the state in which your situation arose. Mr. Andersen is licensed to practice law in Ohio.