I was trying to mint a new NFT. I clicked a link on Twitter that looked legitimate. A popup asked me to “Sign Transaction.” I did. In seconds, my wallet was wiped of 10 ETH. It wasn’t a hack; I technically authorized the transfer. I felt sick. Insurance told me, “You gave them the keys. That’s not theft; that’s a gift.”
Key Takeaways
- “Voluntary Parting” Exclusion: This is the killer clause. If you voluntarily sign a transaction—even if tricked—it is often excluded from theft coverage. You “parted” with the property voluntarily.
- Social Engineering Fraud: Some high-end cyber policies cover “Social Engineering,” which includes being tricked. Standard policies do not.
- Wallet Guard / Extensions: In 2026, using browser extensions that simulate transactions is standard. If you didn’t use one, insurers might claim negligence.
- Irreversibility: Unlike a credit card chargeback, there is no “fraud department” to reverse the transaction.
The “Why” (The Trap)
The trap is “Authorized Access.”
From a technical standpoint, the smart contract didn’t “break in.” You signed a permission slip giving it access to your funds. Insurance covers “Unauthorized Access.” Since you signed it, it was authorized. This distinction saves insurers billions.
The Investigation (I Called Them)
I asked cyber insurers about “Drainer Scripts.”
Evertas
- Position: They are one of the few underwriting this risk for institutions. For individuals, they require strict whitelisting protocols. If you signed a “Set Approval for All” on a sketchy site, they might deny based on “failure to validate counterparty.”
Norton/LifeLock (Restoration)
- Position: “We can help you scan your computer for malware afterwards, but we cannot reimburse the ETH.”
Wallet Providers (Metamask / Phantom)
- Position: They warn you. They accept zero liability.
Comparison Table
| Action | Standard Theft Coverage | Social Engineering Coverage |
| Hacker cracks password | Covered (Unauthorized) | Covered |
| You sign malicious contract | Denied (Voluntary Parting) | Covered (Fraud/Deception) |
| You send to wrong address | Denied (Error) | Denied (Error) |
Step-by-Step Action Plan
- Install Transaction Simulation: Use extensions like “Pocket Universe” or “Wallet Guard.” They pop up and say “This transaction will take all your ETH.” It stops the panic click.
- [IMAGE: Screenshot of a Wallet Guard warning popup saying ‘YOU ARE GIVING UP ALL ASSETS’]
- Use a “Burner” Wallet: Never connect your “Vault” (cold wallet) to a minting site. Send only the mint price to a fresh hot wallet. If that gets drained, you lose $50, not $50,000.
- Revoke Allowances: Go to Revoke.cash immediately. If you signed a malicious contract, it might still have access to future deposits. Revoke all permissions.
- Report to Chainalysis: You won’t get money back, but flagging the address helps blacklist the hacker on exchanges.
FAQ
Does homeowners insurance cover “User Error”?
No. Just like they don’t pay if you accidentally drop a $100 bill in a storm drain.
What if I was drunk?
Still voluntary parting. Being impaired doesn’t void the exclusion.