>>>Please confirm what you are saying with someone who can provide an accurate legal interpetation.

If you need to confirm it, contact a local attorney in the state in which you reside. However, consider this: What will my credit card company or PayPal do if I contact them and say I didn't receive the item for which I paid?

>>>I agree that title passes to the buyer when it has been accepted by the buyer

ok.

>>>Since the title is still with the seller, then the it would be the seller who would be compensated if there is an insurance payment.

This is correct.

>>>But ... if I state in the auction description that "Insurance is the buyer's option. If the buyer does not take insurance, then shipment is at the buyer's risk."

This is not correct. You may not pass title of an item with a simple disclaimer.

The insurance part is a red herring. The buyer has no insurable interest. What you are trying to do is simply "disclaim" responsibility.

>>>Then this is a valid condition of the sales contract. When the buyer makes a bid, the buyer agrees to the condition. Correct?

Not correct. You may require that the buyer pay for *your* insurance but the failure to do so did not transfer title of the item and the related risk of loss to the buyer.

Try and put this in the text of common business practice. Is there anything that you buy where the risk of loss is the buyers prior to your actually receiving it?

Here's the real kicker, many states have laws to protect buyers such that certain clauses (even if explicitly agreed to) would be null and void because they would be illegal.