Australia Post's "insurance" only covers you for items lost or damaged when the loss or damage is AP's fault, and they'll admit to it. (I honestly don't know how they get away with calling that insurance.... but I digress). 

For breakage, that means they have to determine that the item was packaged to their standards (i.e. can withstand the impact of a 20kg weight dropped on it from waist height), and that whatever caused the damage was their fault.