“Insurance is never a good idea in general” is a bit too extreme. Not all hedges have to be about protecting you from a wipeout. It’s about opportunity cost for the premium vs the risk (magnitude x probability).
In many cases, these programs aren’t profitable, especially if the extended warrantee covers products with unknown problems. Neither the supplier nor the purchaser knows the true risks of warranting a new product, they only have historical data to go by. Often they are profitable, on products that actually were far more reliable than consumers expected (eg. Phones whose screens get harder to break).
But even then it doesn’t mean it’s a bad idea to buy it, as you can’t predict the future, you can only make bets and cover your risk exposure to some degree. That risk coverage and piece of mind is valuable even if the unlucky event never happens.
At a bigger scale than product warrantees, Health and Life insurance are both profitable but also often worth purchasing to protect you or your family as it’s the ultimate case of hedging against bad luck. You’re trading reasonable, predictable costs against actuarial events with huge (potentially bankrupting) costs. Some folks that didn’t need it, they spent a reasonable an amount of money and still got value out if it: risk coverage and piece of mind.
>can't risk paying for it yourself.
is intended to mean
>can’t afford for themselves.