Insurance is one of those things you pay for and hope to never use. But, it's great when you do!
I wish I was like zazan and never needed it, but when I totaled out my Droid X in a parking lot, I was 3 months away from an upgrade Granted, I may have been able to find a cheap used one if I'd had the time to look around and be picky. However, I simply didn't and we didn't have another phone handy for me to use while I did that. So getting a guarantied replacement overnight was worth the money I'd paid in.
In short, it's not just a matter of dollars and cents to me as much as it is a commitment that I'll get a replacement in a short time. Kinda like auto or home owners insurance. I never want to need it, but it'll be nice to have it there when I do!