Many of these threads around, and I have a few minutes this time to post my thoughts on these.
First, they are not "warranties", they are pre paid service contracts.
Second, these companies are in business because (a) they pay out less than they take in (and / or, b) they are paying out at a lesser rate the they take in (kind of like a ponzi scheme)
They are also in many ways like Las Vegas, except you are betting against yourself. Las Vegas does not exist because more money leaves town than comes into it, neither do service contract providers.
Las Vegas, and these service contracts providers, play upon the notoriety of the few big winners, while the vast majority of people are losers or break even at best, and are ignored. With service contracts you always hear about the people who made out, but seldom you you hear about the majority that loose out over the long run.
With a service contact, since you are betting to loose, the contract proably has a 1/2 page of what they will pay for and pages explaining in great legalese what they will not pay for, which is of course how they make thier money.
The other nasty part is that many times these companies take a long time to pay out (that cash flow game) and / or pay a lesser rate for repairs than the shop normally makes, so your shop is not happy, and either puts you at the end of the line, puts thier most inexperienced people on your repair, and or simply does not honor the service provider because of all the hassles (more of the manufacturers are taking this route at thier factory service centers). The other part of the hassle for shops is they get to be the one to tell the customer the bad news, and take the heat from the customer.
With regards to the manufacturers not honoring service contracts at the factory repair centers, who can blame them? Fixing things under the real factory warranty and managing customer expectations / satisfaction is one thing, but they are in a no win senario with service contracts......
First is the cash flow game. Then, quite a bit of what comes in under factory warranty is based on the customer simply not knowing how to use it, or something the customer flat out broke themselves (wether they realize it or not) because they didn't know how to use it in the first place. Beleive me, the techs have a pretty good idea of what workmanship gets by in the factory, and things they see fail commonly due to the build process and they also know pretty well what a customer screwed up themselves, but in most cases, the factory sucks it up to please the customer.
But, if the problem falls outside the factory warranty period and the customer brings it to the factory service center, with a service contract and they think they will be getting "free repairs" but the service provider will not cover it, the factory either sucks it up and does it just to keep the customer happy and not have to deal with it any more, or they become the bad guy......
On the other hand, as much as I do not like any sort of service contract, when we were looking at buying our first RV, one of the costs we budgeted against a used unit was indeed a service contract since you assume all the risk otherwise. We bought new, and did not purchase an extended service agreement........
2015 Tiffin Allegro 31SA, 24k chassis
2015 Jeep Cherokee Trailhawk