I don't think it's a scam you get 2 years of hardware repair for a few extra bucks. I had a 3GS that one line in the touch screen went bad. If I had AT&T insurance I would have had to pay a deductible to get it fixed...plus time without a phone. Apple overnighted me a phone and credited me for mine. No it won't cover dropping it in a beer or on the parking lot. Also take into consideration it will cost around the same amount for a 3rd party company to fix a broken screen...and void your warranty than just let apple fix it the right way. Scam no.... Unnecessary..... You decide