Man, that sucks.
I just went through this a few months ago with UPS. I sold my Heartbreaker on Ebay and it got destroyed.
The buyer sent it back to me, and was cool at 1st. I told him that it would take me a week to come up with the money. At the end, right before I could pay him back, he turned into a huge A hole.
I bought it back and filed the insurance claim. Here is how it works though, they will do whichever is the cheapest out of these 2 options:
1. They will refund the entire amount of the purchase or insurance purchased, then take the amp and scrap it as a total loss.
2. They will refund the amount that it takes to repair the amp.
I called Rich at Mesa and got a quote from him. Even though I'm a Mesa tech, I had to have a 3rd party do the quote. Unfortunately I get dealer's prices and UPS got off a few hundred $ cheaper than they should have.
I got the amp back, broken in half, and got about $482. BUT, it took over a month to get it settled.
They also shipped it back in the box that it was originally shipped in, to the wrong zip code and name. I called for a week asking where it was and they said they had not seen it. I finally went down there and found it.
Almost any courrier is better than UPS.
In the end, I kept the Heartbreaker, fixed it up, rebuilt the cabinet, and modified the hell out of it. Now it's a keeper.
I think this will work out fine for you. Either way you will get your money back, but it is a pain in the butt and a waste of a great amp.
If the amp is fine and the guy ships it to you again, DO NOT let him use peanuts again though. It should be wrapped in dense foam or thick styrofoam, at least a few inches thick on all sides. The tubes should also be numbered, removed and bubble wrapped so they won't get broken. The peanuts will float to the top and the amp will drop to the bottom.