my opinion
It's the Sellers responsibility to make sure the item arrives. The $50 insurance is the default amount, meaning he didn't request and pay the extra few dollars to cover the transaction costs.
I had a similar experience and sold a Nez rat that never arrived. After many months, I did get the ripped cover of the shipping box in an envelope from USPS, with the statement that they would look for the contents. I refunded the full amount to the Buyer once the box was two weeks late, , just as i would expect Amazon to do for me.
Go thru the USPS processes for Lost packages....DO NOT MISS ANY DEADLINES!!!!......they use a missed deadline as reason to close the work order.
After everything i went thru, i got an email from USPS basically telling me that i didn't know how to ship packages.......but i used their own boxes, shipped thru customer counter, etc.