Many sellers appear to be under the misapprehension that it is the buyer's problem if they don't receive the item in good condition, or don't receive it at all.
It is in fact the seller's responsibility, and the seller's choice whether they decide to opt for insurance.
From eBay's Help pages:
"Postal Insurance
It is the sellers responsibility to ensure that the item reaches the buyer, so it�s down to you as the seller to decide if you want to insure an item being sent, not a choice for the buyer to make. If it is lost enroute, *you* are responsible for replacing the item, or refunding the buyer."