Wow. Even more surprising.
I am not a gambling man - never have been.
No extended warranty was bought on my corded drill - but I did get one on the big NiCad powered on that has a $39 battery pack for $10....result: battery replaced, no more $ spent.
Pair of cheap sleeping bags bought knowing they were cheap and likely to fall apart - and they did - bad zippers and stitching....result: Full refund after a year+ of usage for an added charge of around $5.
Air mattresses, numerous...all made of vinyl and destined to leak sooner than later. ALL covered when purchased - ALL collected on sooner or later and ALL replaced at no further cost, EVEN the most expensive Aero one.
Notice none of these things are small, handheld electronic devices, recently made ?
That is because this thread is about those and well-explained already.
It is NOT about gambling, insurance per se', or horses (and BTW I have been keeping horses for 1/2 of my middle-aged life successfully too, so hit me up for info if you need some...!).
Before things got horribly cheapened and quality-lowered I might have also had a very negative POV and yelled a bit against these things..but times have changed and they are a much better thing now than they were 10 or 20 years ago; and for me as I age they are even better because of the lowering finances in my life AND as a wise person said above - the simple peace of mind they provide.
And if they strike you as 'gambling' and distasteful, I think that is just great too.