The federal district court for the Northern District of California has ruled that a homeowner's claim for stolen cryptocurrency is not covered because there was no direct loss to physical property. The case is Burt v. Travelers Commer. Ins. Co., 2022 U.S. Dist. LEXIS 147564 (N.D. Cal. 2022). 

The Burt siblings (the Burts) inherited a large Coinbase account from their late father in November 2020. Five months later, hackers took over the account and transferred the entire account balance to their own accounts in less than a day. The Burts filed their claim one month later. They were told an exclusion applied, but the carrier was having trouble determining which one. The Burts made multiple requests for the determination in writing, which Travelers still had not provided as of August 2022. The siblings sued Travelers for declaratory relief, breach of contract, breach of the implied covenant of good faith and fair dealing, and multiple violations of California Unfair Trade Practices; Travelers, in turn, filed a motion to dismiss for failure to state a claim of relief.