This has happened to me before, but as others have said, as long as the tracking shows Delivered (and the declared value is under $250 due to Paypal), then you are good to go, and will win the case. For the buyer's side, I believe ebay will allow one exemption per account, where ebay will still refund the buyer even if the package tracking shows delivered (and this will not come out of the seller's account).
Regarding putting signature confirmation and insurance on every package or over $100, this has been debated among sellers. There's a school of thought where if you don't put insurance (or signature confirm under $250) on packages and instead use the money saved and put it into an "insurance" bank, then you will come out ahead in the long run where you pay out any claims you need out of your "bank." For myself, I usually just put everything in a Priority Mail small flat rate box with signature confirm if it is $250 or over, and only add additional insurance if it is $400 or over.
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