The banks and credit unions aren't the one's covering the deposits. FDIC is for when the bank itself fails, when they can't cover their customer's deposits.
And yes it happens all the time for regional banks and credit unions. SVB was news only because they're an odly large and important regional bank. But they were treated by FDIC like any other. No depositor at any retail bank in the US has lost their money due to a bank failure in 20+ years.
Yes that's just reiterating what I literally said originally.
There aren't different tiers of FDIC insurance. The banks aren't choosing to paying for extra coverage. The FDIC is a federal program. Yes the banks pay into it. It's required by law that they do. But the FDIC decides on it's own if it will cover more than $250k. And they have, for every bank collapse, no matter the size, at least since the late 90s.