Ebay dilemma...HELP!

Right now I have perfect feedback and I`m almost certain that if I don`t refund his money (no matter what the P.O. did/does) that he`ll give me a negative feedback. It`s a buyers responsibility to opt for insurance and the carriers responsibility to deliver the item intact. I offered him UPS as a carrier, which automatically insures up to $100.00 but they were a dollar more and he decided not to use them. It`s an inequity that (although it`s out of my hands once I`ve shipped the item) he can give me negative feedback for what the carrier did and I cannot give him negative feedback. I feel absolutely powerless. I`m between a rock and a hard place, I guess all I can do for now is hope that the post office will honor the insurance claim.