It's my understanding that under the UCC, the seller in any mail order transaction is obligated to deliver the item in good condition. The seller is free to add the cost of Postal Insurance to his shipping charges, but if insurance is not discussed, the seller still has the obligation to deliver. Saying "you did not ask for insurance" is not an excuse.

Insurance protects the seller's obligation to deliver the goods safely, the buyer does not need additional protection since he's already granted it under the law.

This may be splitting a hair too fine, but I go a step further and say that if a seller says "shipping is $x.xx. If you want insurance, add $x.xx"., the buyer is under no obligation to pay EXTRA for insurance to be protected, since the right to safe delivery is already granted under law.

I'm told the buyer must specifically waive his right to safe delivery, and receive something in return for it, for his waiver to be valid.

My End of Auction reads as follows:

"Your high bid was $x.xx, 1st Class Insured postage in a protective bubble envelope is an additional $2.60, or Insured Priority Mail is an additional $4.60.

If you want to gamble with these chips, you may elect to waive the insurance, and deduct $1.10 from the cost quoted above. By doing so, you assume responsibility for safe delivery."

I don't even do the math for them, if they want to waive the insurance to save the $1.10, they need to do the math themselves (express action), and they receive a DISCOUNT in exchange for the waiver.

Of course, Doug, this is essentially moot, since you're not likely to sue him over a small amount of money. But if you did, I'm pretty sure a court would force him to issue a full refund.