I could do it that way. But the cost of an extended warranty is such a tiny part of our investments/savings, it's just not a worry. It's just the price of peace of mind and I'm willing and able to pay it.
There's certainly value if it helps you sleep at night. I just don't get the same peace of mind from having to ask an administrator if my issue is covered, having to use their parts, their provider, on their time schedule, etc. Cash remains the ultimate peace of mind for me, and I can go where I want, when I want, and use the parts provider I want. Forums are full of people upset about the reman tranny or whatever the warranty company used and people upset because their warranty claim was denied, either for legit or specious reasons.
Do you keep a home warranty that covers your HVAC system, etc? If no, what's the difference?
You still aren't factoring the refundable nature of this warranty.
Does it not make you question the level of payouts they have vs the money they take in that they can afford to do this and remain profitable?
It's a great sales tactic, and it's also a great psychological ploy to make you not claim the smaller, but more frequent, repairs that may be required. If you need a $350 repair, do you now gamble your 'full refund' to get them to pay the claim, or do you eat it and keep the warranty for a more expensive issue that may or may not happen?
If you find value in it, buy it. I buy a Powerball ticket a few times a month. I fully understand it's $2 wasted financially speaking, but I have $2 in fun playing 'what if'. My point is simply that financially the house wins long term and you'll do better financially long term by self-insuring for as many risks as you can comfortably support.