In any/every circumstance I've been in with domestic shipping, insurance is NOT the buyers responsibility, it's the shipper's. In my eyes, 100% you should refund this buyer, as he did his obligation in paying you. Your obligation is making sure the cue gets from point A to point B. If you wanted the buyer paying shipping and didn't want to cover the insurance I would have demanded insurance covered, or not sold.
USPS is batting .1000 right now with being late. They've been late delivering my last 3 cues that were overnighted. Hopefully this cue wasn't too expensive, but from experience, don't ship ANYTHING without insurance right now, as it's almost a guarantee to be late at best.
Sent from my Pixel 3 using Tapatalk