You should always charge for postage with insurance, there are too many people out there who will claim something hasn't turned up when it has and paypal will find in favour of them. Most are honest but a lot are not.
When I sell records off my website, I charge enough postage to send them insured in the UK (recorded = £36, spec delivery = up to 500). If someone orders from overseas, I send them signed for and/or insured depending on the value, even if it cosdts more postage than they paid, just so that at the end of the day I can recover my costs in the worst case.
Have a look on ebay US and see how many sellers wil not post to Italy, Spain or France
Not had any probs myself but better safe than sorry.
edit; In terms of costs; I just sent a record to Australia insured up to 200 and it cost about 8.50, one to the US signed for (insured up to 36) cost 5.60. I've sent stuff to Europe insured to about 200 and again it costs about 8 quid.