The "extended warranty" that is sold is one of the highest profit items for a retailer.
Same goes for the "equipment protection plans" or whatever they call them these days.
Figure what the chance of you using the plan/insurance is over the couple of years your phone is worth replacing. Remember that they will probably replace it with a "refurb" and not a new phone. Multiply the chance of you using it by about $200. (A new Nexus is $400, will probably be worth $200 in a year or two, and $100 not long after that.) That $8 a month is about $100 a year. In two years, you could have held onto the cash and, if something happened to your phone, easily bought a replacement yourself, or used the $200 to trade up to your next shiny object.
As pointed out above, even if you do buy it, what does it really cover?
Nexus 5, custom OmniROM builds (don't panic, it means I can brick my SGS4G without fear)
Samsung Galaxy S 4G -- Development version of OmniROM
Fromerly: Development version of Team Acid's CM9 source, Hefe Kernel of Darkness, KG4 modem.
Working on: Cleaning up the build tree for OmniROM and Samsung kernel sources
WiFi Performance, GB vs. ICS, and how to measure it yourself.
FreeBSD, Ubuntu, MacOS X, OpenWRT
Motorola Micro-TAC ("Micro" ) Nokia 2160, 8260, 6681, E70, N900, then had to move on