Originally Posted by God Of Thunder

Insurance is the shipper's option. NEVER the buyer's. On eBay you can 'sneak' your insurance cost into your shipping fee's, but the Insurance is only good for the seller, its a "failsafe" way to get your money back if something should go awry. As far as you 'asking' him for insurance, and him refusing means he is SOL, is COMPLETELY bad information. Take a look at the paypal terms on service (which im guessing is what you completed the transaction through) and you will see that it states the person who SHIPS is the only person insurance is good for. In fact, if he files a "item never received" on paypal, your paypal account will be deducted the full amount and he will have received his money back. Paypal has screwed us sellers over with their 'new' terms and there is a HUGE HUGE amount of fraud going on with eBay now. Apparently, all you hafta do it claim you never received the item, you get your money back, and keep the item. If they had tracking, all you must do it show a photo of an empty carton and claim it fell out through the course of transit. You'd get to keep whatever the purchase item was, get a full refund, and the seller is screwed unless he has insurance. Don't believe me, do a little research, and you'd be SHOCKED at how easy it is to scam sellers on eBay.

edit: And to echo everyone else's thoughts, if the package never shows up, you didn't deliver the item as promised, he's entitled to a full refund.