I've purchased at least 4 machines on Ebay- all older Singers, mechanical. No problems at all. 2 were sellers who sell machines and know a lot about them- the other 2 were regular sellers. Before I bid and after I won I emailed the seller and stressed how important good packing is and to please pay attention to it.
I only buy from sellers with good feedback- sure, something could go wrong but the chances are much slimmer. I sell on Ebay and my reputation on there means a lot to me.
As someone else wrote- ask lots of questions before you buy.
And I also think insurance is a joke- but Paypal protection is great.
Good luck!! :)