Yes, it is...
hopefully this change is still covered under PayPal's seller protection program
Yes, any package that is able to be tracked via internet will be covered. Insurance never helped the seller. It never helped because if you shipped your items first class (U.S. or Outside of the US) and only added insurance you would be fucked. You would be fucked because insurance isn't traceable. It just insurance. Nothing more, nothing less. There is really no benefit to using it unless you're adding it to a traceable package.
For example if you ship your package/item(s) "Express Mail (international or domestic)" then it automatically covers you with insurance up to $100. You can add more if you wold like. Express mail is traceable and has a signature requirement. Then we already know about the "Registered Mail". You can add insurance to that too, but why if you can prove that he/she/the buyer got the package.
The purpose of insurance is to cover the seller/shipper not the buyer if the item is lost/stolen and or damaged. The problem is that it's doesn't provide proof of the items arrival, because it's not traceable. This means that your customer can simply say that they didn't get your package and Pay Pal will side with them because they can't confirm it's arrival via internet. This also, means that you wasted your money, because the post office will say that yes, it arrived on such and such day at such and such time. They'll/the post office will have their pack and could tell you that it did arrive. This means that they/the post office won't give you your insurance money back. Now you're out of your item and your money all because you didn't send it in a traceable manner. Now if you package really is lost and/or stolen, then it's good, because they will back you, but if you buyer is lying...you're fucked, because they/the postal service can prove that it arrived. You can't, because it's not traceable via the world wide web.
So, what really is the point of having shipping insurance if it doesn't help you as the seller anyways? This is why I don't care if they get rid of it. I don't use it anyways. I live and die by "Registered Mail". They can't escape the tracking and the signature of somebody who lives at the address you sent it to. No way, no how.
eBay can get rid of that, I really don't care, because it wasn't worth shit anyways.
I found out about this stuff, because I've been got by buyers and I took it upon myself to get more educated on how to prevent this from happening over and over again.