While I agree, that the shipping insurance is a bit confusing until you understand it... it is pretty clear that you don't understand at all what is happening. The buyer pays you for the full item AND the full insurance premium. Then you keep a percentage of the premium (as profit) and send us the rest to cover the insurance policy. The total is still less than the USPS insurance, but you get to keep some of the money.
In fact, all we ask is that you send us money AFTER you have a balance due to us of $5. In other words, you can try out Auctiva Shipping Insurance for free and keep all the profits (remember the insurance premium is paid to you by the buyer during checkout). If you like it, we just ask that you pay your balance (the premium) to us with your credit card or you leave a positive balance on our site (once again to cover the premium).
Sounds complicated, but it is quite simple. The buyer buys the insurance and pays you. You then pay a portion of the money received from the buyer to us to cover the premium.
Simple and another way for you to generate revenue on your sales.
Bill