And here I feel obliged to report that I've been on the sender's end of this problem.

In my case the item was delivered and reported not received. ($150) My terms were that the buyer had to specify the level of shipping desired. It went UPS standard. Insurance is limited at $100 at this rate. I refunded the $100 that UPS insurance paid out. Since shipping was his choice I figured the risk was his too. For all I know, he either got the item for a net of $50, or a not with a loss of same, no way to tell. My experience has somewhat soured the allure of selling on eBay. That was the first time I tried and so far the last.

In your case, a charge back might motivate the seller to initiate an insurance claim. If he does, or not, you get your money back.