I work at Ritz and I think i might be able to shed some light on the subject.
We sell what's called an expanded service plan, it's generally not a whole lot of money, if you buy a $199 camera, it's 33 bucks for a years worth of coverage against pretty much ANYTHING, except theft, fire, or loss. As long as you bring it back in, we'll send it out for repair and we'll pay the repair bill, not you.
I've seen enough people come in and i've broken enough of my own stuff to recommend them.
I actually have a 1 year on my 50mm f/1.4G, because i've broken almost all my lenses at one point or another, and paying $75 fora years coverage as opposed to $300-400 for an inevitable repair is a no brainier for me. what's the worst that could happen, i'm out $75 over the course of a year? c'mon, I work minimum wage and that's chump change.
Now is it for everyone? of course not. It's not for the people who baby their ****. But if anything it gives you piece of mind, and if it's an SLR, you get as many free sensor cleanings as you want over the course of the plan.
It's your gear, your decision. I'm not trying to play salesman here, this is just my own personal experiences.