Ebay and Paypal fees are your expense. This is the cost of doing business. Incorporate this cost into the cost of your item, not the shipping and handling fee.

Shipping and handling fees are lumped together in your stated or calculated cost. Be sure to add a little to offset Paypal percentage fee on the shipping cost. Say it costs $20 to ship an item, paypal collects 3% on the $20 so you loose and additional 60 cents in Paypal fees. Shipping cost of $6 is about 18 cents, so if you charge actual shipping, you are loosing money. Charge $5 for Priority Mail 1 pound package and the actual $4.80 + free box from postal system, free delivery confirmation when generating shipping label with paypal and you are good to go. Don't forget the cost of tape, packing materials, etc. Use postal system Priority Mail boxes (free) when you can. Used boxes from the store or recycle center.

Insurance: Well, I see a lot of  "not responsible for loss or damage if insurance is not purchased" . For your information, the seller is responsible for loss. Proof of sending an item means nothing. If the item is not received, the seller will have to send another item or refund the purchase. If you cannot prove delivery to Paypal or a credit card company, they will deem it not received and the buyer is intitled to a refund. If paid by cash, check or moneyorder and you cannot prove delivery to ebay, they will step in on behalf of the buyer, you could face suspension or at minimum a NPS (non-performing seller strike). If the item is damaged, the seller is not responsible, it is the buyers option to cover the article for damage by the carrier (common case is the postal service, UPS, FEDEX all cover up to $100 automatically).
Bottom line, insurance is to the benifit of the seller.  

Insurance fees: You are only suppose to charge the actual amount of insurance for insurance. It is a violation of Ebay, Paypal policies,  and Federal & State Surety Laws to charge more for the insurance or to self-insure a package. You need to pad your shipping and handling fees to cover % loss on the cost of insurance coverage ( that paypal 3% whatever you are being charged by Paypal or your creditcard processor) Charging $2 for Postal Insurance that costs $1.70 is a violation. Collecting insurance on a package valued up to $100 that is automatically insured to $100 by USPS Express Mail, UPS, DHL or Fedex, is also a violation.

Buyers and sellers, be informed.....

Read my other guides for shipping tips.