I have not file insurance claims with U-Pic personally but we have been doing business with them for many years and I have only received very few complaints about the claims process. The only complaints I have handled have been easily cleared up by putting the sellers in touch with the U-Pic Claims department to confirm what else was necessary to process the claims in question.
If an item covered by an Auctiva shipping insurance policy is lost or damaged during shipment, the first thing you would need to do is have your buyer fill out the Buyer Affadavit and Fraud Prevention forms (which can be emailed from the View Insurance page) and send them back to you.
Once you have received these forms from your buyer, you would then send them to U-Pic along with the Claim Form and supporting documents using the instructions on the View Insurance page. Once all of the required documents are received and the claim is approved, you should typically receive your reimbursement check within about 10 days.
In the event that a buyer receives a refund based on a Paypal dispute and is unwilling to participate in the claims process, U-Pic will likely accept the Paypal dispute documentation in lieu of the regular buyer documentation. If such a circumstance were to arise, I recommend contacting U-Pic directly for the specifics on how to proceed using the information on the following page of their site:
I hope this helps. If you have any other questions on this topic, please feel free to contact our customer support team by mousing over the "Help" tab within your account and selecting the "File Support Case" option.