Insurance: Sellers offering insurance may only charge the actual fee for insurance. No additional amount may be added, such as “self-insurance”. Sellers who do not use a licensed 3rd party insurance company may not require buyers to purchase insurance. This is a violation of state law.

That is straight off of eBay, it sounds to me like you cannot self-insure, but it is kind of vague....it says you cannot "require" buyers to purchase insurance. But it does say you can't add any amount for self insurance.