That's not quite right insurance will pay for that part of the...

That's not quite right insurance will pay for that part of the losses that they are insured for and the insurers accept liability of. I've seen it with oil co spills, blowouts etc there can be a gap. It's moot whether the sell-off is completely over done.
To be fair though, I bought back those I sold in the very sharp run-up, at around this price .