When I was selling a fair ammount of stuff on Ebay I usually paid for the insurance on anything expensive or fragile. The $5 cards I didn't bother figuring if it went missing I'd just take the hit and refund.
I have had UPS refuse packages even without insurance. One was a barn find computer that was collectible, they insisted on it being shiped in the original styrofoam. Even after I explained that the original packaging was likely tossed over 20 years ago and wouldn't be of much use anyway and that the computer was obviously good only for parts- It had hay sticking out of the empty drive bay. Nope, wouldn't take it at all. They also refused the half a victrola because it was an antique and didn't come with an appraisal.
Thanks UPS for making me carry 120Lbs of stuff into the shipping center then rejecting it with unannounced policies.
The post office accepted both, and charged less.
I haven't had to deal with UPS or Fedex on lost/damaged packages except for while I was shipping stuff for work through a commercial account. But I have helped a friend with a damage claim through USPS, and the process went smoothly. He had to show the packing and the damaged item - An Edison cylinder player- To someone at a main post office, as well as an estimate for the repair from an expert or two. There was only one local repairer, so being a fixit guy I wrote one out for him. I just matched the experts quote. His price was very reasonable, and I doubt I could have done as well for as little. USPS paid in a few weeks, pretty much as they said to expect.
Steve B