PAYPAL sais insurance is waste of money!!!!!!!

I have been on Ebay over 10 years and this week got a shock of my life. A customer refused to pay for insurance and Paypal took my money from my account for him. I sent Paypal an e-mail showing the customer only bought the item for revenge feedback for a friend. Paypal said e-mails are here say and even though customer admitted to only buying an item to give a revenge feedback, I still had to give a refund. I said the person committed fraud and refused to pay for insurance!!! IMPORTANT--A seller must return full payment, no matter the amount, even if a customer refuses insurance. THIS IS REAL!!!! PAYPAL rep. said they do NOT want people to know about this because the fraud has been increasing and if everyone knew this rule, Ebay and Paypal would be in trouble!!! I am not saying this to help thiefs but to protect seller's from an absurd, irresponsible, disgusting, immoral, etc.. actions. Paypal rep. said people who pay for insurance "is STUPID" and "WASTING THERE MONEY". So seller's after Ebay raising there prices, forcing us to use Paypal, now every transaction a customer could e-mail Paypal and require a refund. Say card had a nick. Item never came. Wrong items sent. Keeps the item and gets a refund!!!! Is this me or is this NUTS and just aPaypal action that is going to cause millions of more sellers to leave. Please, even if you don't like posts, pass this on to all sellers because this is devastating. Ebay's rules contradict this but Paypal is a payment company and comes under different guidelines. I spent over $100 on one item tonight and could of not paid for insurance and make a false claim and get the item free. I PAID for insurance because I am honest but hope all could see how easy PAYPAL is making fraud available to customers!!!! Pathetic behavior and Paypal and Ebay wonders why there stock is down over 90% and Ebay lost 10's of millions of members. We know now where Paypal's MORALS are, down the drain!!!!!