Cannot insure return package?

Hi r/usps! I received merchandise last week from an online retailer and decided I wanted to return it. This retailer had a return packing slip available, so I put it on the front of the box and took it to the nearest USPS to my work to ship it back, intending to get a printed receipt and also to purchase insurance (my package retails at $500).

I was in line when a USPS worker came to kindly offer to take the package off my hands as he thought I was simply dropping off. I told him I wanted to buy insurance, and he took my package to one of the machines, typed in the zip code of the return address, and said that this zip code does not accept additional services beyond certified receipt (or something similar to that), so I could not actually purchase insurance.

My questions are -- am I still liable if the package is lost in the mail on route to the online retailer? What's the rationale behind not allowing insurance of these packages? I was trying to avoid risk like this if possible, as $500 is not a small amount of money to me.

Thanks!