As I said in another thread, I just invoked extended warranty on my Droid Charge. Phone keeps rebooting, and let's face it it just sucks compared to phones out today.
I think the website is just reminding you of the fundamental difference between extended warranty and TEC, TEP, or whatever they're calling it. Extended warranty isn't insurance; if you lose the phone you are majorly SOL. The wife is always home and has (knocking on wood) never lost her phone. I have historically lost my phone (last time I lost my phone was at an Atlanta airport....thank God I had Lookout which locked and wiped my phone.) So I have always gotten TEC on my phone.
So I'd still go ahead and get Extended Warranty if you are sure your phone will never be lost or stolen. Trust me, after a year, EW is totally worth it, provided a phone is never lost or stolen. For morons like myself, I need TEC. LOL.