By not including insurance (including self insurance, which is what I use for the most part) the seller is NOT giving the buyer an opportunity to save money. He is giving himself the opportunity to make more money.

Example: I seller a cheap chip (worth about $6) on ebay. I charge $3 shipping. Chip sells for $4 (because reasonably intelligent people factor in the shipping charge). I do not offer insurance. If anything happens during delivery I reimburse or replace. Simple

Now for the case of the seller providing an "Opportunity" to save money. Same chip goes on ebay. $1.5 shipping with ins optional. Chip sells for $5.5 (a reasonable assumption since the cheaper shipping allows for a larger bid). Many choose to save money by not choosing ins. Something happens to package. Screwed

Don't you get it. By including ins (self insurse) in the shipping, buyers will bid less yet they are fully protected. Offering ins as an option is a tactic used by sellers to make more money on each auction for THEMSELVES. Looking out for the buyer. You are kidding me, right?