If your home and auto insurance are packaged together, and your homeowners is paid in full by mortgage company, can the insurance company cancel you?

It depends on the grounds for cancellation. There are numerous legal reasons why an insurance company can cancel a policy or policies, including late payment (did the mortgage company pay on time?), false or incomplete disclosure on an application, filing of a false claim, failure to provide required documentation or cooperation, etc. If a policy is canceled, the insurer does need generally to refund the unused portion of an premiums paid. If your policy has been or is in danger of being canceled, the first step is to ask the insurer "why" and then compare their stated reason to the policy(ies) in question, to see if that's a valid reason or not for cancellation.

Can the car insurance compel you to what?  Also pay in full?  That is a very interesting situation and one that most homeowners probably do not often think about when bundling the matter.  Your agreement is a contract and the terms of the contract - as agreed or bargained for - are what is binding.  So you need to read what you agreed to.  Maybe payment is discounted for payment in full and monthly installments are not part of the agreement (although in this day and economy I can not imagine how the company be so unreasonable as to not allow you that option since most charge a monthly service fee anyway).  Speak with your agent and the company.  Ask them to point out where in the agreement it says what you are asking here.  Then you can decide how you want to proceed.  Good luck.