Law, not that I'm aware of. Good sense, yes. If you are looking to save some money by eliminating it, consider discussing options to lower your coverage, raise your deductable or other ways to reduce your premium.
The most important thing is to have adequate liability so that if someone is hurt on your property you don't lose the house and everything else with it.
If the house is a teardown, then perhaps the risk of loss isn't that great. But homeowner's insurance also comes with liability insurance, and with a teardown that would be even more important to have in case someone is injured on the property.