My home owners insurance already paid for the damage, but as it turns out i've decided not to rebuild?

The sole purpose of insurance is to indemnify or make you whole after a loss. It is not intended for you to make a profit, that would be gambling. Your policy will have a section devoted to this wording. Please read it because you may have signed an application agreeing not to profit on your insurance and may be obligated to either rebuild or refund some of the claim money. I know that does not always sound fair, but it is what it is and the alternative isn't pretty. You are also under obligation with your lender to rebuild as they still have an equity stake in your home. By not rebuilding the garage, you have lowered the equity in the home without their permission and left them in a precarious situation.