Better- self insurance, sometimes called Cookie Jar Insurance.
On low priced items and on items where fraud is unusual., add a few pennies to every asking price to cover occasional claims of loss or damage. Put these virtual pennies in a virtual cookie jar.
When a customer reports a problem, refund her from the cookie jar. The customer is happy, no one paid very much more (but we can see why shoptheft raises prices, eh?), and Paypal did not get involved. Having PP cases opened may not hurt your selling account, but being forced to pay a refund will.
On high value or high fraud items, look into third party insurance. We use Hugh Wood International, a British firm with offices in Toronto, but while they are great for professional dealers in collectibles, their annual contracts may be more than you need.
Other sellers have praised shipinsurance who will do one-off parcel insurance.
