My personal view regarding insurance is a balance of risk tolerance vs volume.
Certainly if one ships 100s of $1,000 items then "self insuring" is probably wortwhile for a $1000 item.
I think the majority of us here are sending average sized items in the $25 to $100 each range. Generally for most folks the "cookie jar" insurance plan would be worthwhile for the average sized item if it is lost.
The problem is if one is sending a "rare" large item compared to the average order size. The % risk of loss is the same for a $25 item as a $2,000 item, but the cash flow impact of losing the large one is much more catastrophic.
For a simplified example lets say my average item size is $25, selling 500 a year. Cooke jar insurance easily lets me cover lets say an exhorbitant % loss of 5% = $625 (which is still positive against the $500 if one uses a $1 per item put into the cookie jar and a 5% loss rate is about 10x what would normally be experienced) The problem is if perchance the $2,000 item is lost, the cookie jar of $500 is gone as well as $1500 direct.
This is what I think most folks are worried about. Generally we aren't fortunate enough to sell many extraordinarily large items, against our average order size but when one does, one doesn't want to risk that one being the 1 out of 200 items lost on average.
For me personally, I have 3rd party insurance that kicks in if the item value is over $200. It is part of a larger expensive plan (for a business) but this portion is very very economical compared to the theoretical covered value, something like 1/4 of 1% of covered sales. Same as you, I do not remember when I had an item valued at the covered rate lost, but the 1/4 of 1% cost to make sure it doesn't happen and related peace of mind is very very worthwhile to me.
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