I have bought a great number of items from eBay, all using PayPal.
I enjoy the convenience, security and peace of mind.
I have never had an issue or a reason to question/dispute a transaction until now.

 It only takes one small event to destroy the goodwill of hundreds of events.

I purchased something from overseas. It had Buyer protection and the seller was eBay/PayPal certified.
On the eBay page it even said to make sure I used a certified seller to be covered by PayPal protection.

The item never arrived. The seller did ship it and can provide shipping information from Germany.
It got on a plane about 90 days ago and never made it to Australia.The Australian Customs and shipping partner has no record of it leaving the plane. It is not here and it lost.

 I raised a dispute with PayPal. I am not disputing that the item was not sent, rather that I never got it. Covered by insurance? No. The dispute has been closed because the German version of PayPal does not require proof of delivery.

They only need proof of shipping in the first place and then their job is done.

 So what do I do? I lose the money, I don’t have the item and have wasted countless hours looking into this. I am out of pocket.

 This is a very unfair system. The communication emails from PayPal did not explain any of this. I had to ring on numerous times until someone worked out that the German PayPal terms and conditions was why the dispute was awarded against me.

The item had been shipped so therefore it is now my fault that the item has gone missing and it is my burden.

 As I said, 

It only takes one small event to destroy the goodwill of hundreds of events.

 I will no longer use PayPal. This hit my wallet too hard to forget quickly.