$800 a year? I'd pass on that too. Mine was about $1500 to extend it out to 10 years or 100,000 miles. Deductible is $100. My two repairs would have cost me $2500 so even with the deductibles I'm ahead $800. Mind you I've had my car just over a year.
Now, that said, my water pump "failure" was minor. I detected it at 50k miles and drove another 27K miles on it before I changed it out...even then my motivation was more my turbo build than a faulty pump but at least now I don't have to worry about changing it AFTER the turbo is on the car and the warranty no longer valid.