Tim is right, ship it in one box. When you generate the label on Paypal, ALL the items associated with that label/invoice are under the single tracking number. Once that tracking number or Delivery Confirmation number is tagged as "received" so are all the contents.
Also, why are you so afraid of needing the protection? Are you shipping to a risky place (out of country?) or an unconfirmed address.
I know I've heard horror stories about how people were taken by a buyer filing a false report to Paypal and such. Fortunately, it's never happened to me, and it isn't something I worry about when I ship. I don't mean that in any disrespect to you. Since I do use Paypal for all my shipping, I'm getting labels with traceability, but even with that I still ship to "unconfirmed addresses". Unfortunately not ALL customers have a confirmed address, and I can't refuse to ship to them.