Insurance for the People

I've been trying to figure out the safest, cheapest way to ship my products since I started over three years ago. I still haven't found a fail-proof method, but I think I'm improving things.

Currently, I'm trying to find a way to insure all packages against loss or damage, but without making shipping costs unaffordable. It costs a lot to ship glassware (especially pint glasses) because they're large, often heavy, and need a certain amount of padding to keep them safe. I have a few options that I'm considering, but I'd like to know what you think too.

Option 1: You can ask for insurance to be added to your order for an extra $1. If you don't insure you package, I can only replace a limited amount of goods if something were to happen, but you save a buck because accidents happen rarely. (This is the way it is now.)

Option 2: I can raise all shipping prices by $1, and everything will be insured by my shipper, but there will be insurance claims to fill out if anything happened, and they may not cover all situations. More bureaucracy = More hassle for everyone, but your package is safer and it's not that pricey.

Option 3: I can raise all shipping prices by $2-3, and basically insure everything myself. No claims to file or third party judgements. I'll replace anything at all, and everyone goes home happy, but all orders are more expensive.

I was going to switch over to option 2, but I don't know if everyone would like that. It's economical, and filing a claim really isn't that hard. It's just annoying to do, and they require that you hold onto broken merchandise until the claim has been dealt with (could be 1-3 whole months).

I'm also looking into shipping through Fedex for larger orders (4 or more glasses), since they're a bit cheaper and include insurance. This would only save you a few dollars, and be more work for me, so I'm not ready to switch over just yet. If there are any experienced shippers out there with some advice, I'd love to hear it! Please answer the poll on the right sidebar (or leave a comment) to let your voice be heard!