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You need to get in touch with the insurance provider and ask them what you need to do as the recipient has not received the package and try and collect on the insurance. If he paid via PayPal he will get his money back unless it has been more than 30 days and then you may luck out but PayPal can still choose to refund him. If he left you neg feedback and you want to get it removed he has to agree. Offer him a refund if he provides you with a statement saying that he never received the item and if he agrees to remove the neg feedback. Process the refund after you get both of these accomplished. It is a bum deal but without tracking there is not much else you can do. I also expect that the insurance company will not refund the value of your item as it did not have tracking. Basically they should not have sold you insurance on the package as it wasn't insurable without tracking. Sorry, but thats the way it goes.
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