Hi Melissa,
It sounds like this buyer sent a check or money order without completing the checkout process. In this case, just go ahead and reply to the case with the item number for which you would like insurance and we will apply it from our end.
If the buyer had completed the Auctiva Checkout, the status should have been "Payment and Transit" which would allow you to mark it as "Paid" when you receive payment. Unfortunately, at this point in time, there is no way to mark items "Paid" when the buyer circumvents the checkout process.
-Mike