I guess I've been lucky to never had that kind of
problem. Anyways, I guess I can but in my two
cents worth.

I think that the seller was in the wrong when they
did not insure for the full value of the items.
Its not like they had to bear the cost of the
insurance themselves. Most sellers just pass it on
to the buyer. If anything I tend to go the other
way with insurance. My most recent "sale" was for
a figurine. I bought/sold it fairly cheap compared
to the market value. When I insured it, it was for
market value since that is what it would cost to
replace the item if it were damaged. The buyer
still covered the full price of the insurance
(which admittedly wasn't very much).

Maybe the seller got confused about what was in
which package (if they sent several at a time). I
 think they would be obligated to cover it since
it was still their mistake, but it may explain
their reluctance.

The only other legitimate reason I can think of
for underinsurance would be the country where you
live. I know that many buyers in Europe do not
want to pay import/custom taxes. They often ask
the sellers to understate the value and mark the
package as a gift. In that case, I feel that the
seller would not be responsible for the full
value. Maybe the seller thought that's what you
wanted? 

Otherwise, its like I said before. It is the
sellers responsiblity to adequate insure the
package. If they try to save money by
underinsuring, then they are the ones who should
assume the finacial risk. They took a gamble that
happened to not go their way.