The only way this works to remove the USPS insurance is to have it added in on the checkout_shipping page and then you can remove it on the checkout_payment page ...

Remove the code change I gave you in in post #369 and see if adding this code works better for you:
Code:
      $selected = (($_SESSION['insurance'] == '1') ? true : false);
//override optional setting and force decline to be checked from the start
      $selected = true;