Manufacturer warranty is one year (U.S.) for defects. So if a proximity sensor goes, battery or other componet you are covered.
I went with best buy coverage. I've never had insurance on a phone before, but the lady told me they will replace the phone even if you just ding it up. Pretty much everything is covered and you can drop it at anytime. It's nice to have that piece of mind. If I scratch the screen or ding a corner, I can take it in and have it replaced. With the way this phone is built, I doubt there will be refurbs.