Most insurance policies will include exclusions against damage caused by government action. According to insure.com, the most broad homeowner insurance policy, HO-3, will cover against everything except a small number of things, government action being one of them. This appears to be corroborated by investopedia, as well as an article by lexis nexis.

The government has the right to search/seize property if there is probable cause that a crime occurred. If there was actually probable cause is a different question as I know the search warrant was sealed even to Burt when it was executed and I haven't read anything about it ever getting unsealed.