Here was the course of events if you are talking about my latest fiasco.

Item sold for $505, starting from $9.99 with no reserve.

The buyer paid with a paypal immediately.

I emailed the buyer that $2.20 was only enough to pay for $100 in insurance about 1 hours after his payment.

After 4 days and no response from him, I shipped it.

You know the rest of the story.

I don't pay for insurance unless the buyer wants it. Find a seller who does, especially for items that go for $500. Insurance alone with the USPS is about $6.20. My Ebay and paypal fees alone run about 10% to 15%, so now I should also eat shipping and insurance too. What I learned was that a buyer can rip off a seller under the right circumstances and the supervisor I spoke with at Paypal admitted it. I also learned to never shipped USPS for a paypal payment. What that will cause now is that I will get a Signature Guarantee which means I will have to ship it via Priority Mail. Cost is about $4.50 plus the cost of the bubble mailer rather than the $2 I was charging.