I like to charge flat rate shipping so I calculate to the farthest point and then if it comes in less that is my "handling charge." Overall it works out well for me, not excessive for anyone but I cover my packing and travel costs. For items that "require" insurance, the insurance is for me, because I can't afford to take the loss on some items, especially collectibles that I can't offer a replacement on. I add the insurance into the shipping cost and say "insurance included" in the auction description. Never had a customer complain or question that policy.
"You can catch more flies with honey than you can with vinegar." I think a little sugar coating in your TOS goes a long way to attract customers.
For some interesting really bad advice on selling see the About Me page for n.s.sherlock on ebay.
Really Bad Advice