Return of earnest money after home broke into and ac/furnace stolen and damage 2 home

[Tom Thomson]

We are set to close on a property by the 31st of July per contract.   We found out the property was broke into at 4 am yesterday and the newer furnace/ac were stolen along with some damage to the hardwood floors and the front door where they pried it open with a crow bar.  We have ask for a mutual release and return of our $2,000 earnest money due to the fact we no longer feel it is a safe area because of the break in and there have been a few other red flags along the way.   The seller has agreed to let us out of the contract but does not agree that we should receive our earnest money back because he says he is able to bet everything damaged and stolen repaired and replaced before closing.   Any opinions out there on if I would have any legal right to get the earnest money returned to me or should I just be happy he is willing to let me out of the contract and consider the $2,000 em cost of doing business?