I normally would not get any of these additional warranties either but when I had my Range Rover, I got 3 nails in a span on 1 year. And those patches don't work very well. I seem to be a magnet for nails.
I didn't know about the wear and tear warranty...now another one for me to look into! But $700 doesn't seem too bad and may def be worth it. I'm so anal about my car, it actually seems like a good idea.