I think it’s because if you have an accident and choose not to turn in an insurance claim, they won’t be liable for putting your safety equipment back together.
Don’t misunderstand, in general I think these products are terrible wastes of money.
And now that I typed that someone will post Doug Demuro’s Carmax/Rover video or offer a personal anecdote of how their wise decision to buy one of these things saved them thousands.
To me you accept a certain amount of risk in life, and the smaller the potential loss the less it makes financial sense to buy insurance against it.
You can “hack” warranties though, especially if you expect the product to fail.
I bought a $3800 electric riding mower with lead acid batteries. Mower warranty is 3 years, battery warranty is 1 year. I paid $300 for home depot protection which extends the battery warranty to 3 years (adds other things too like transport). Then, since I bought it with my Costco credit card, that extends the warranty further by 2 years for a total of 5. The expected life of the lead acid batteries is 1-3 years and they cost over $1200.
You could convert your bmw to a CPO at lease end like I just did. Cost me $3000 for the 5th and 6th year warranty for a 2020 M340 before the $500 CPO rebate, so $2500 effective.
The effective $2500 includes the $200 inspection fee. Other than that, I paid the following, which I would’ve had to pay for a regular purchase as well.
