But seriously, you will need to file a claim, expect it to take forever, and not be sure they will pay up.
If you have a buyer that wants a refund, well you might as well just pay them and then deal with the post office yourself. Otherwise, you'll have an angry customer waiting an eternity for possible cash. Especially if it's eBay.
I would prefer to work with private insurers like u-pic and Endicia if I was doing a lot of insuring. If I was selling full time I'd probably pay for one of u-pic's 'all packages' policies, which would cost a lot, but you might actually get somewhere with them.
Another option is to self-insure, which is basically what eBay insists you do whether you like it or not. You could take these out of your gross income or you could charge everyone $1 in addition to postage to try to hedge against your payouts over time.
I have one as well. I love stuff like this. Good luck with the sale.
Great seller and hardware guy! He fixed up my Intellivision 2 controllers, dunno how, those things are a pain to get into and out of! As well as several CV controller of course.