Actually, the insurance companies know with high statistical accuracy and the costs are priced into the insurance policies. To refine the point, they know better than you do.
Extended warranties are often the highest profit product that any dealer sells. A few years ago Best Buy's entire year profit was approximately equal to their profits selling extended warranties. That is why the saleskid pushes them so hard. Same-o with car dealers. You can see this anecdotally in this thread -- few people make claims.
If you just have to buy one, negotiate hard on the price. I would start at half the offered price and make it clear that I know I can buy the warranty lots of places besides the dealership I am talking to. If the salesperson doesn't break off the discussion at least twice to talk to his sales manager you are probably leaving money on the table.