USPS not adding insurance

[dlt101]

The USPS module is not adding insurance to the shipping cost.
We have a $2 handling charge. The only Extra Services checked are:
Insurance
Priority Mail Insurance
International Insurance

Please see attached USPS debug log. It looks like USPS is returning insurance rates but Zen is not adding them before displaying.
In this example, the displayed MEDIA postage is $5.22. That looks like a basic $3.22 plus our $2 handling fee.
Why no Insurance???