Here’s a question. Let’s say someone breaks into your home and steals all your CDs. Let’s say you’ve wisely insured all your possessions, so you can claim for the CDs’ surprisingly high collective value. Let’s also say your CDs were stolen from your cupboard, where you put them after ripping every single one to your capacious hard drive.
So, we get round to the question. What is it that you’ve had stolen? You still have the music — the bits — and you never play the actual CDs these days anyway. It wouldn’t make sense to spend that surprisingly large amount of insurance money on replacing the hundreds of items you’ll never use (because, being sensible, you’ve also backed up all those bits). It’s as if you’ve only lost the now worthless and empty packaging. To put the question another way, what is it you’re actually insuring?